Saturday, August 14, 2010


* Joe Kristan reports that “Thirty-one Congresscritters have signed on to an AICPA effort pushing back against the IRS preparer-regulation power grab” in his post “I Hate to Say 'I Told You So'...” at the ROTH AND COMPANY TAX UPDATE BLOG.

However the underlying WebCPA article tells us that –

House lawmakers on both sides of the aisle, including nine members of the tax-writing House Ways and Means Committee, have asked the Treasury Department and the IRS to exempt non-signing tax preparers at CPA firms — employees of CPA firms who prepare returns but do not sign them — from onerous registration requirements.”

CPAs themselves are already exempt from the substance of the “onerous registration requirements”. So why should those employees of CPA firms who most likely actually do the bulk of if not all the work on preparing client 1040s be exempt? Someone in a CPA firm should verify competence if the firm is going to do 1040s – the actual CPAs certainly do not have to.

Joe and I disagree on the entire topic of tax preparer regulation.

* The NATP weekly email newsletter pointed out that Congress is also concerned about the testing requirement –

The Congressmen stated that the competency testing requirement may impose unnecessary burdens on the IRS’ limited resources and tax return preparers and ultimately increase taxpayers’ costs for return preparation. They also are not convinced that testing will eliminate some of the problems the IRS has identified within the tax preparation industry and they do not believe the IRS has adequately demonstrated that testing is needed. They feel that once the PTIN and registration system is operational, the IRS will have the resources necessary to track preparers and determine which ones need discipline.”

I continue to believe that most existing unenrolled preparers should be exempt from the competency test via “grandfathering”, but that there should be a competency test for “new” tax preparers. My criteria for grandfathering is – “current unenrolled tax practitioners who have been preparing federal individual income tax returns consistently for five years (60 months), who have earned 50 hours of Continuing Professional Education credit in Individual Income Taxation in the two year (24 month) period prior to registration, and who are not currently prohibited from preparing federal income tax returns because of past bad acts will be exempt from taking the initial proficiency examination.” I would be willing to reduce the 50 hour in 2 years CPE lookback to 30 or 35. I also believe that ALL PTIN holders should be subject to the minimum annual CPE credits in federal income taxation – including CPAs and attorneys.

* Before leaving Joe Kristen let me repeat Joe’s comment at “Charlie Rangel Asks For His Dignity Back” – “Good luck with the dignity thing, Congressman.” Did you see him "defending himself" before Congress? What a fool!

* Back to NATP’s TAXPRO WEEKLY – which also reported that “Actuaries with the Social Security Administration have projected that the social security wage base will remain at $106,800 for 2011”.

* Are you suited for the exciting world of taxes and accounting? Check out the “10 Ways to Know You Were Born to Be an Accountant” at the BEST ONLINE COLLEGE blog.

* As usual some good advice from Trish McIntire in her post “Taxpayer Education VIII” at OUR TAXING TIMES.

* Michael Rozbruch tells us “How to Qualify for Innocent Spouse Tax Relief” over at ASSOCIATED CONTENT.

* I join Kay Bell in her rant against the “Growing Number of Irresponsible Owners Walking Away From Home Equity Loans”.

* TAX GIRL Kelly Phillips Erb posts an interesting question in “Fix the Tax Code Friday: Filing Status” -

What if there was no such thing as filing status? No single, no married filing separate, no married filing jointly, no head of household, no qualifying widow with dependent child. Just one taxpayer per return. What do you think?

Be sure to check out my comment.


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