Wednesday, June 25, 2014


The Institute is running scared that a voluntary designation would shatter the “ownership” it believes CPAs have of the tax preparation – and put an end to the “urban tax myth” that a CPA is automatically a 1040 expert.

A few years back the AICPA sent the following response to an inquiry by a member (the highlight is mine) –

"We do not offer a credential in taxation. In general, our approach has been not to develop credential programs around areas for which the public already believes CPAs to 'own'. In addition, we do not endorse a particular tax credential."

Click here to see the source of this quote.

Michael Cohn, reporting for Accounting Today, tells us –

The American Institute of CPAs has sent a letter expressing strong concern with the Internal Revenue Service’s proposed voluntary certification program for tax return preparers, saying it ‘would cause significant legal problems that may ultimately frustrate the IRS’s goals, confuse the public, and lead to litigation’.”

The IRS has been offering a voluntary certification program for tax return preparers for decades now – the designation is known as the “Enrolled Agent”, or “EA”.  I cannot see how this designation has caused any “significant legal problems that may ultimately frustrate the IRS’s goals, confuse the public, and lead to litigation”.

I will admit there has been confusion among the taxpayer public as to what an EA is - but this is because of the poor name given the designation (some taxpayers assume that an Enrolled Agent is an agent or employee of the IRS) and the fact that the IRS does not properly recognize or publicize the designation.

An IRS-sponsored voluntary RTRP-like designation would not be substantially different from its offering of the Enrolled Agent designation – it would be sought of like an EA-Light. 

The AICPA feels the new voluntary designation proposal - “is arbitrary and capricious because it fails to address the problems presented by unethical tax return preparers, runs counter to evidence presented to the IRS, and will create market confusion.”

No designation will substantially address the problems presented by unethical tax return preparers.  Becoming a CPA has not stopped those so-designated from being unethical or from preparing fraudulent tax returns. 

There will be no market confusion.  A new tax-preparation credential will identify and clarify for the market those who have proven basic competence in 1040 preparation and keep up-to-date on the constant changes in the tax laws via mandatory annual CPE in taxation.  The market may think possession of the initials CPA does this – but in reality it does not.  The mere existence of the initials CPA after one’s name does not in any way, shape, or form indicate that the holder knows his arse from a hole in the ground when it comes to 1040 tax law. 

An individual CPA may well be a 1040 expert, and many are, but it has nothing to do with the initials CPA.  It is because of the specific knowledge, training, education, and experience of the individual.

Over the years I have found more errors on 1040s that have been prepared by CPAs than on any other source or preparation, including self-prepared returns.

If the IRS is going to offer a voluntary RTRP-like credential I have suggested that it be part of a two-tiered program that includes the current, but renamed, Enrolled Agent designation.  Click here.

But better yet, I believe a voluntary tax preparation credential should be offered and administered by an independent industry-based organization.  Click here.

So let’s be honest – the AICPA doesn’t care a lick about an IRS-sponsored voluntary RTRP-like credential causing confusion for the taxpayer public.  It could care less about the taxpayer public.  All it cares about is the fact that this credential will take business away from CPAs.


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