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Tax Industry Pushes Preparer Regulation

A group of organizations in the tax and accounting business are articulating their support of granting the Treasury Department the authority to regulate professional tax preparers

Leaders from four organizations recently discussed their reasons for supporting a proposed law that would reinstitute the IRS’s 2011 Registered Tax Return Preparer program.The Taxpayer Protection and Preparer Proficiency Act, H.R. 4184, introduced by Representatives Jimmy Panetta (D-CA) and Tom Rice (R-SC). The preparer program was thrown out by federal courts.

Representatives of the National Association of Enrolled Agents, The America Institute of CPAs, Padgett Business Services and H&R Block outlined their concerns about professional preparers' qualifications during a press briefing.

Because of the lack of standards and regulations, “Many preparers have become concerned about a race to the bottom for Enrolled Agents,” David Tolleth, EVP of the NAEA, said during the recent briefing. “Almost two thirds of tax returns preparers are unregulated, not required to meet basic competency standards”.

The proposed law would grant the Internal Revenue Service the right to revoke Preparer Tax Identification Numbers because of fraud or incompetence. It clarifies that individuals who prepare returns under the supervision of an attorney, CPA or enrolled agent are not required to obtain a PTIN. The act also would require a Government Accounting Office study on the sharing of information between the Treasury Department and State authorities regarding PTINs issued to paid return preparers and preparer minimum standards.

The problem of preparer competence has been aggravated by the impact of the COVID-19 outbreak, Tolleth said. “The pandemic has catalyzed a new wave of fraud and scam,” he said.

Additionally, IRS resources have been strained because of inadequate funding.

Bob Scott
Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards.  Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He  has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that.  A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind
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