WebCPA reports that thirty-one members of the House have signed a letter to Treasury Secretary Timothy F. Geithner urging changes in the Internal Revenue Service’s proposed plan to regulate paid income tax return preparers:
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. Lawmakers are further asking for a delay and further study of an IRS proposal to create a nationwide examination of tax preparers.
The group, led by Brad Sherman, D-Calif., and Michael Conaway, R- Texas, said the IRS should modify its proposal.
“We believe that the IRS has neither demonstrated the need for extending the non-signing preparer requirements to CPA firms nor that its proposed testing program merits shifting IRS resources away from other mission-critical programs,” they wrote.
“We believe that any testing program should be deferred until the IRS has performed an adequate study to determine the level of return preparation problems caused by a lack of preparer competence and whether testing would have a meaningful effect on reducing those problems.”
The letter argues that requiring IRS registration of non-signing preparers who work for CPA firms is unnecessary because state boards of accountancy already regulate CPA firms and individual CPAs, and because the IRS would be able to monitor the quality of the CPA firms’ work through the preparer tax identification numbers of the CPAs who sign the tax returns.
It seems that the IRS, like the U.S. Military, is susceptible to mission creep.
What began as an effort to regulate previously unregulated and unenrolled tax preparers has now, as Joe Kristan might have predicted, crept into the regulation of already regulated CPAs, IRS Enrolled Agents and tax attorneys.
The congressmen are right. The IRS needs to scale back its tax preparer regulation thing a few notches.
4 responses so far ↓
1 Tax Preparers as IRS Auditors: It’s Coming Folks // Aug 23, 2010 at 9:57 am
[...] 31 Congressmen Ask Geithner to Ease Up on Tax Preparer Regulations Bookmark & Share: [...]
2 31 Congressmen Ask Geithner to Ease Up on IRS Tax Preparer Regulations at Taxes // Aug 27, 2010 at 3:19 pm
[...] 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 [...] Tax Lawyer’s Blog [...]
3 Michael Clement // Nov 3, 2010 at 11:42 am
This is a lawyer’s blog. How come none of you legal eagles have picked up on the fact that there is no law giving the IRS authority to regulate tax preparers?
4 Peter // Nov 3, 2010 at 6:17 pm
Michael,
Congress has the right to delegate power to administrative agencies like the IRS and it has done so. The law lets the IRS determine how to enforce the law.
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