There has been a lot of posting throughout the "tax-blogosphere" during the past few weeks on the topic of regulating tax preparers - both pro and con. I have done my share of posting, and commenting, on the "pro" side.
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Before I put this topic "to bed" let's take one last look at the arguments.
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First and foremost, it appears that everyone on both sides agrees pretty much that registering and licensing currently "unenrolled" tax preparers (like myself) will do little, if anything, to cut down on fraudulent tax returns and unethical preparers.
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Just as regulation of CPAs, lawyers, and doctors has not rid us of unethical members of these groups, regulation of tax preparers will not rid us of unethical tax preparers.
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Opponents to licensure say that we do not need an expensive and convoluted system that will place a harsh financial burden on both the IRS and the honest and ethical unenrolled tax preparer.
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Granted Congress and the federal government could "fuck up a high mass", as the saying goes. Monica Lawver, the TAX CPA, puts it a little more delicately, "In my experience, government )and the IRS in particular) does not operate efficiently."
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But if done reasonably and properly (yes I know these are two words not often associated with Congress, the federal government, or the IRS) the regulatory system does not have to be a complicated and expensive mess.
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The beginnings of registration already exist with the current PTIN registry. The application and renewal process, and accompanying fees and CPE requirements, could follow the system already used for Enrolled Agents (EAs). There would be an initial application fee of perhaps $125.00 and renewal every one, two or three (as is the case with EAs) years at perhaps $50.00 per year. EAs must earn an average of 24 CPE credits per year, with a minimum of 16 hours in any one year, to maintain their "enrollment". This sounds like a reasonable requirement for licensure.
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The IRS already offers a good source of reasonably priced CPE offerings with its annual Nationwide Tax Forums, although the price has been steadily increasing. If all tax preparers are regulated this program could be expanded to at least double the number of locations where the forum is presented.
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CPE does not have to be earned at a sit down class. There exist many opportunities, through NATP for example, for continuing education credits to be earned through "self-study" or online, making the costs of earning the required credits even cheaper.
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There does not need to be any FBI background checks or fingerprinting or any other such invasive requirement for licensure. Just pay a fee and either pass an initial at most one-day proficiency exam or be "grandfathered" in via length of service and a CPE look-back requirement, earn the required annual CPE credits, pay a renewal fee periodically, and don't break the rules.
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I expect that there would be a minimum return requirement for licensure. One would have to prepare at least 25 or so returns professionally (i.e for a fee) per year to be covered by regulation. This way Uncle Joe, a retired accountant who prepares the returns for his extended family only in exchange for dinner or gas money, would not have to face sanctions for "practicing without a license".
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The cost of administering such regulation would be covered for the most part by the application and renewal fees, which could generate $125 Million initially and $50 Million per year.
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Most people will agree that licensing accountants, lawyers, doctors, barbers, electricians, etc is better than not licensing them. And so licensing tax preparers is better than not licensing them. Currently anyone who can add can hang out a shingle as a "professional tax preparer" and there is nothing to contradict them. While it is not the best argument in the world - "it couldn't hurt" is still a valid one.
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For me the most important value would be in putting the competent, experienced, and ethical previously "unenrolled" preparer on an equal footing (a term used by one proponent) with the CPA in the eyes of the general public. It would dispel the unfounded "urban tax myth", perpetuated perhaps more by uninformed journalists and bloggers than by the CPA community, that only CPAs are tax experts.
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CPAs who want to prepare tax returns would also have to meet the annual CPE requirements in "taxation" that other newly licensed preparers would, and EAs would be automatically grandfathered in by virtue of the fact that they are already licensed tax professionals. So instead of CPAs, EAs and unenrolled preparers who prepare tax returns there would be only one category - the Licensed Tax Practitioner.
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For as long as I have been in practice, I, a competent, experienced, ethical tax preparer, have been placed in the same "category" as the individual who has read the IRS instruction booklet and done his own return a couple of years and now decides to hang a sign in the window and prepare tax returns in between haircuts at the barber shop where he works! As a Licensed Tax Practitioner I, and hundreds of thousands like me, can finally get the respect we deserve!
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It would be nice if along with licensure Congress would also forbid Licensed Tax Practitioners from offering Refund Anticipation Loans (RALs) directly to clients. Just a thought.
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But despite all the talk on the subject I expect the bottom line has been provided to me by respected fellow tax blogger Professor James Maule of MAULED AGAIN (who has not blogged on the topic but told me that he agrees with those of us who want to license tax preparers). According to Jim -
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"Ultimately I don't think anything will happen. Congress is doing other things, and yet it will find time to tell the IRS to relent on its proposals."
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If I can be permitted one last comment before I say good-bye to the subject - AccountantsWorld.com has a discussion page on the topic of licensing tax preparers with many, many comments from practicing tax professionals in all categories - CPAs, EAs, non-certified accountants, and unenrolled preparers (click here to review the comments).
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I was interested, and pleased, to find that quite a few of my fellow unenrolled preparers who posted on this message board have joined me in saying that they have found more errors on tax returns prepared by CPAs than any other category of preparer!
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'Nuff said!
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TTFN
1 comment:
Well, there you have it. Why would I write on a subject where, almost exactly, another is writing my thoughts and opinions.
As for finger printing, I'd like to point out to become eligible to become an authorized e-file provider one (including myself) is finger printed and "run through the system", so there in that is another step, although above and beyond, that would help speed the processes up towards licensure.
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