A federal judge has denied the Internal Revenue Service’s request to suspend his January 18 ruling that struck down the IRS’s tax-preparer scheme as unlawful, but made some important clarifications to his original ruling.
U.S. District Court Judge James E. Boasberg ruled Friday that no tax return preparer may be required to pay testing or continuing education fees or to complete any testing or continuing education while the injunction is in place, backing up his earlier ruling (see Court Rules Tax IRS Doesn’t Have Authority to Regulate Tax Preparers). The IRS had asked the judge to suspend his injunction on the tax preparer regulatory regime, arguing that it would disrupt tax season (see IRS to Appeal Ruling Barring Licensing of Tax Preparers).
The Institute for Justice, which had won the case on behalf of three independent tax preparers who sued to stop the IRS’s Registered Tax Return Preparer mandatory testing and continuing education regulatory regime, filed a legal brief countering the IRS’s arguments (see Tax Preparers Contest IRS Legal Ruling). In Boasberg’s latest ruling in the case Friday, he denied the IRS's motion for a stay, asking, “[W]hy should tax-return preparers continue to pay into a system the Court has found unlawful?”
However, Judge Boasberg clarified that his injunction did not affect a separate set of regulations requiring tax preparers to have a Preparer Tax Identification Number, or PTIN, or prevent the IRS from operating its testing or continuing education centers on a strictly voluntary basis.
The court wrote today, “[S]ome preparers may wish to take the exam or continuing education even if not required to. Such voluntarily obtained credentials might distinguish them from other preparers.”
“This is a great outcome for tax preparers nationwide,” said Dan Alban, lead attorney on the case at the Arlington, Va.-based Institute for Justice, who represented the three independent tax preparers who had challenged the IRS. “It allows them to continue preparing tax returns this tax season without having to get permission from the IRS. This is the best of both worlds—preparers who value the certification can still obtain it, but no tax preparer is forced to get a government permission slip to earn a living.”
47 Comments
"With all due respect for those that consider this a political or rights issue, the fact of the matter is that "tax preparers" that are not governed by advanced education and certification requirements, such as those required of CPA's, are not governed at all. " -Posted by: gregmarriott@sbcglobal.net | February 14, 2013 11:27 AM
It seems this is a HOT topic and there are some correspondingly hot feelings on what seems to be the "two sides" of the issue.
As regards the quote above, which seems to be a thread running through a large number of "pro IRS control" messages, not just here, but whenever there is an article posted with regard to the issue. There are at least two states that have in place regulations for people who prepare tax returns for pay, California is one of them and I am writing from there. The basic requirement that IRS proposed for continuing education has been part and parcel of the CA requirements for at least 10 years. So, I think that if someone wishes to make such a claim, one should be prepared to take a look around and realize it is not really true.
With regards to CPA and lawyer requirements to meet in order to prepare a tax return, they may have to take refresher courses in their fields, but they do not have a specific tax-preparation related requirement, as to non-CPAs and non-lawyers who wish to be "legal" preparers for pay - at least in CA, but the best of either group will, in any case, keep up-to-date with tax regulations. I know one taxation-specialist lawyer who refuses to prepare a return, although she probably could prepare a rather good one.
As to the IRS charging for my PTIN, I have some personal feelings about having something I got for free taken away and re-issued after paying a fee for it. They may as well start charging a yearly fee for your SSN - I am sure that would raise the temperatures of a large number of people to the boiling point!
I have no objection to requiring tax preparers to be "educated". Anyone dealing with taxes and serious about it must know that the tax code is complex and dynamic - a moving target - which even the people making-up the rules don't grasp in its entirety, not that anyone can! So, keeping-up is a must, even without anyone having to advise or require you to do so!
However, the argument that the IRS is not really the appropriate venue for imposing requirements for tax preparers has a sound basis.
More can be said and I am sure it will be, but I shall stop here and wish whomever takes the time to read this a very happy day. And, thanks for lending me your attention for a few minutes. =DM=
Posted by: Raccoonnookkeeper | February 15, 2013 12:51 AM
Report this Comment
With all due respect for those that consider this a political or rights issue, the fact of the matter is that "tax preparers" that are not governed by advanced education and certification requirements,such as those required of CPA's, are not governed at all. Income tax returns are signed "under penalties of perjury" and are legally administered by the internal revenue code, circular 230 and state income tax statutes. If you do not have an advance understanding of these governing laws, you have no business preparing tax returns for the public. You can do your own return, or any other without pay. But if you are charging someone for this service, you need to be held accountable. This is not an issue of the preparers rights, it's an issue of the taxpayer's rights. Taxpayers have the right to make sure there is a system in place that requires a paid preparer to be competent and to maintain this competency. If the preparer is unwilling to seek and embrace required education and knowledge, more than likely they are not qualified. And more than likely, they would not be able to pass the required examination. Why else are they concerned about it? I don't care how many tax returns you have prepared and how many have not been questioned by the IRS.
Posted by: gregmarriott@sbcglobal.net | February 14, 2013 11:27 AM
Report this Comment
To radavig, so you want more of a police state by the IRS?
The main point is Article I, Section 1; All legislative Powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and the House of Representatives.
Only Congress can make laws, and they cannot delegate that power. That means federal departments cannot make laws.
We're in the trouble we're in because we don't abide by the Constitution, but we can restore our Republic if we only restore the Constitution.
For liberty!
Thanks, IJ!
Posted by: MikeCPA | February 6, 2013 9:03 PM
Report this Comment
Just a short comment tonight. Since the IRS required test and continuing education is not now required does that mean all of us diligent responsible tax preparers who paid a lot of money for CPE hours and a then mandatory test are going to get a refund? My business has been slow because of the delay of tax season and the delay of forms. I am sure we could all use a refund.
Posted by: COKIEA57 | February 5, 2013 11:28 PM
Report this Comment
I am so glad that there are preparers fighting the IRS and winning. I have read all the Pros and Cons and amazed that no one has mentioned the money that the IRS is getting from us. I went up on the IRS site out of curiosity looking for information on PTINS. They have registered over 611,000 people who have PTIN numbers. 611,000 X $65.00 each, is over $39,000,000. Yes, we are math people .FOLLOW THE MONEY Doesn't it bother anyone that the IRS has gotten paid, by us, over 39 million dollars for the sheer privledge of us doing 95% of their job?. and guess what? They get to do it again next year. Now the states are starting to follow the money train. I have been charged for a separate pin by New York $100. Wonder how much they will get from us.
Posted by: KITNJAY | February 5, 2013 7:54 PM
Report this Comment
Today I had a new client request a copy of her last year's return from one of the less popular taxprep franchises. She had a $2200 refund in 2011. Of that amount she only received a net check after bank fees and preparer fees of $1400. That's $800 in preparation and bank fees for a 1040A. Yes, there needs to be some type of preparer oversight.
Posted by: ElanaFrans | February 5, 2013 6:39 PM
Report this Comment
Many months ago I asked for your input for pricing of tattoos on the upper inside lip of CPAs with their PTIN so that the IRS could readily identify and control the CPA. I was looking forward to a booming side business. With regret, I must notify each of you that with the recent court case striking down the IRS right to do this, I am closing operations.
And one has to ask how did we get to this point?
In principle, it makes no sense to me for an administrative agency to determine who should represent someone who often has adverse interest to that agency. To presume the IRS is flawless, fair and without bias is without evidence. The IRS needs to be challenged, with a vigorous defense not moderated by intimidation that later they will withhold the ability to get a PTIN.
And yet the public should be protected in a systematic way that provides real results.
The IRS felt the need to do something, however wrong, because of the void left by others. The Boards of Accountancy are the ones charged with protecting the public, and for some reason appear to limit themselves to CPAs, who because their diligence, create far less problems than the unregistered, uneducated, unwashed, and more likely less competent preparers. These preparers create many problems out of simple ignorance rather than the intention to misuse the system.
Who else is better suited to independently protecting the public than the BOA. They do not need to reinvent a common system for doing so; the IRS has created it already. They do not need to create a funding source; the IRS has created it already.
The state CPA associations, who are charged with advocating for the CPA should find this a very good opportunity to differentiate the value of a CPA, reduce the competition from incompetent people, and promote the public protection.
Gosh, I could even start my tattoo business up again.
Posted by: skypilot62048@gmail.com | February 5, 2013 4:51 PM
Report this Comment
I'm with you radavig, let them do the enforcement of all the laws they have already passed on to us. I wouldn't mind an unannounced visit by the IRS anytime. Let them take all the $$ wasted on the RTRP program and give it to their IT guys who can come up with the formulas to determine who's doing the cheating. Some of the returns I get in here from other preparers, or by the taxpayer themselves, should have drawn a red flag when processed, but didn't. I had one new client last year that was widowed in 2011, who brought me her return that her late husband prepared. Not only did he list the $18,000 + of dividends he received, but he also subtracted the total amount on schedule B and carried a -0- over to the page 1 1040 line. Not only did he do this in 2010, but he'd been doing it exactly the same way for over 5 years, and not once have they ever been called in! That's just over $22000 in tax savings that I couldn't have saved him! Of course I advised her that it doesn't mean they won't catch it, but the clock is ticking and it could be any day she gets a letter from her friend, the IRS, or maybe not. When I suggested the Amended returns, she looked at me like I was going to turn her in and I almost lost the job. I did mention in my cover letter that we would be more than willing to help in filing these amended returns for her, and it will be surprising to see if she comes back this year.
If the taxpayers themselves don't have to take a course on filing their taxes, and the IRS personnel leave much to be desired when it comes knowing their own rules and regulations, enforce the rules they already have in place, and they'll weed out a lot more of the fraud that currently takes place.
Posted by: PAT | February 5, 2013 4:46 PM
Report this Comment
I think, with few exceptions, no one is getting the main point. I have no problem taking a test on the very basics of tax preparation. But, a test and a certificate are NEVER going to stop crooked preparers from abusing the system. Most of these guys would have no problem passing the RTRP or even the EA exam. They are smart enough to know how to prepare a bogus return and get it by the IRS. If the IRS really wanted to stop preparer fraud they would invest all the money they spent on the RTRP program and hire field auditors to do unannounced, in tax season inspections of preparers. I have no problem with them showing up at my door to review my returns and backup. Testing is not a deterrent, enforcement is!
Posted by: radavig | February 5, 2013 1:44 PM
Report this Comment
I have been reading the various comments from the EA CPA, Attorney and Preparer community. Point blank - the IRS is out of line with the RTRP imposition without carefully investigating the impact and feasibility of implementing this requirment. The individuals who filed the lawsuit apparently did their homework!!! Don't be upset with them for doing so....
I do agreee that there should be some standards, like the continuing education requirement. With the plethera of companies doing training online, there is no reason why all prepares, including CPA, EA, and Attorneys should not be up to par as it relates to tax law. Requiring the education is a way to ensure that people know the law and the changes that impact their client. Again, this is something that could have very easily been managed and validated for compentency purposes. Anything more that this should have been properly investigated and phased in so as not to disrupt the tax community, work, and abilty to earn a living - especially given that many have been preparing taxes for years and can do a correct return without software...which is where a lot of the problem lies. With software, one doesnt really have to know the law, just plug in the numbers...which is why so many have entered this profession without understanding tax law and impact.
Lastly, there is enough business for everyone out there: To those who can practice before the IRS - please stop complaining...there is a sector of business that you will always get because you are certified or registered!!! Be a community; Do your best work! Lets wait and see what develops. It is a good thing to be able to make a living.
C...
Posted by: cwlovestax | February 5, 2013 11:06 AM
Report this Comment
how can we hope to legislate "competent" and "ethical"? It seems (and always has!) logical to me that the best thing we preparers can do for our individual clients is help them understand their own tax returns! And help them to know "how" to learn about the forms that are on them. For the ones who aren't interested in doing so...well, I recommend to them that they check in with the local franchisers. And make it clear that I am not interested in their taxes...if they are not! Has served me pretty well for over 40 years, now.
Posted by: the1040co@gmail.com | February 5, 2013 10:53 AM
Report this Comment
I agree with the court in that IRS lacks the authority by our constitution to "regulate" paid tax preparers. I do not agree with the notion that we should not be regulated by someone. Who is protecting the public? Fines and penalties may help some but the damage will have been done by the time the penalty is determined..the tax payer will likely owe more taxes, penalties and interest.
This should have been bumped up to Congress for action....good luck competing with all the other pressing issues faced by that body. I suppose this issue could simply be placed in the ever-growing "to do" list for Congress.
Posted by: bsimmonscpa | February 5, 2013 10:45 AM
Report this Comment
hunt-You hit it, but you are a little late.
Posted by: BRES | February 5, 2013 8:28 AM
Report this Comment
Most of the comments miss the courts point which is "The IRS does not have the authority from Congress to regulate tax preparers" We live in a county that has only authorized Congress to require or not require it citizens to act or not act. If the executive branch of our government can act without authority then why have a Congress. We could ban all the guns require all cars to get 100MPG, stop all speech that is not acceptable, require a state religion and appoint the president of the United States as a lifelong position at the direction of the some executive agency. I sure the public at least some of the public would support those idea as good and needed.
Posted by: huntp | February 5, 2013 8:16 AM
Report this Comment
The standard for California is a "joke." I know many people that pass the exam answers to each other and anyone can take the exam in your place, since it is all done by mail. There is nothing wrong with having some minimum competency testing, and I do not see anything wrong with the IRS doing it.
Posted by: OC | February 4, 2013 11:58 PM
Report this Comment
My two cents worth... First, California already has a requirement for continuing education, and it is not run by the Franchise Tax Board. I do my requirement with a test of my knowledge so that I have more confidence. Second, a couple of years ago, I saw an IRS directive that preparers not take deductions that the IRS was "unlikely to approve". Now on the face, this seems like good sense. But this seems likely to stifle creativity. For example, if this practice were employed, we would still have to depreciate cell phones. I'm going off my fallible memory and perhaps someone will provide specifics, but I recall the directive was rescinded in 2009. Thirdly, I'm not sure that the IRS is actually the best organization to determine what is appropriate or not.
Posted by: OnQue | February 4, 2013 10:45 PM
Report this Comment
Taxpayers will just continue to shop around for those tax preparers who charge less for less. My own personal "tax return from ___" changed tax preparers because I wouldn't deduct personal costs on their schedule C and schedule E(pet grooming, personal home maintenance costs, etc.).
Posted by: csand | February 4, 2013 6:49 PM
Report this Comment
The current state of affairs should be the standard. There are all sizes of tax preparers. Those who wish to become RTRPs should have the option. Also, CPE is a great idea. These two items should be a way for more advanced preparers to stand apart form less advannced. There are tax preparers who have a following and are perfectly happy doing that. Also, we can be tracked by PTIN to see what our error ratio might be.
I sincerely hope this voluntary standard stands.
Posted by: guarddat | February 4, 2013 5:55 PM
Report this Comment
The majority of comments miss the point of the court ruling. The court did not say that regulation was bad. The court said that laws must be made by lawmakers, not by administrative fiat. We already have too many executive decisions and rules that bypass the legal process. The first step to being a competent tax preparer is the ability to read and interpret the law.
Posted by: gwrcpa | February 4, 2013 4:36 PM
Report this Comment
Now if we could just get the commercials off the air that insinuate that if you are a part time tax preparer you are not competent to prepare taxes, better to have the taxpayer use a do it yourself tax program, than a "part time" tax preparer.
Posted by: alwayzyoung | February 4, 2013 3:42 PM
Report this Comment
This ruling is both bad news and good new.
Bad news, because it will delay implementation of a process that we have needed for years. A process which ensures that tax preparers are competent and ethical. We have such processes for doctors, nurses, teachers, attorneys ... even for beauticians and cab drivers. Certainly we should have as least as much for tax preparers. Such a regimen protects not only the tax payers, but it protects qualified and ethical tax preparers from the need to compete with under qualified and unscrupulous operators. And, it serves all citizens in that the process of funding our government becomes more efficient and credible.
The cost to practitioners in terms of dollars and time is small compared to most professions, and is well worth it for all concerned. Circular 230 should apply to anyone who prepares tax returns for remuneration.
The good news is that an overreaching IRS is being reigned in. The IRS should NOT be the entity to administer the needed regimen. That is the FOX GUARDING THE CHICKEN COOP. State boards of accountancy could step up, or the AICPA nationally. Yes, they would then be serving practitioners other than their members, but for a reasonable fee. And they would be indirectly protecting their own members.
Alternatively, the OPR (Office of Professional Responsibility) could be expanded to handle this function. In such a case, it would need to be split off from the IRS and put under Justice or Commerce.
At a recent IRS Nationwide Tax Forum here in Chicago, an IRS official stated that, "The Commissioner views you as the first line of audit." What!!? Are we now going to get salaries paid by the IRS? And a nice government pension? And all those other benefits? I don't think so!
Our clients believe we are helping protect their interests, not those of the IRS. Within the law, of course. They pay us. They trust us. Should we now be forced to tell them we have been made into toadies for the tax collectors?
In point of fact, I believe the IRS would love to control the process of tax preparation form beginning to end. This would be a terrible idea. Again, the fox guarding the chicken coop. Neither the courts NOR CONGRESS should allow this.
Posted by: enorrman | February 4, 2013 1:37 PM
Report this Comment
I have been preparing taxes for 15+ years. I scrambled to get my Continuing education classes completed and now the money I spent is to some degree a waste. However, I know of several people who use the free available tax programs which is mainly for individuals to use and then they charge people to file their taxes. They have absolutely no knowledge of the tax regulations and yet charge $100.00 to $150.00 to do a simple return. I feel that when they created all this free filing available that took away from us honest preparers who do this for a living business. I feel that this should be banned so that maybe everyone would need to go to a registered preparer and in simple instances for those kind of people only charge them 50 or 75 dollars.
I also feel that all returns should be electronically filed and not mailed as I have had clients who a preparer they went to did a paper return and then the return was never mailed and now they have the problems with penalties and interest.
Posted by: Kaye@specialktaxes.com | February 4, 2013 1:25 PM
Report this Comment
Check this out. Seems plaintiffs talked out of both sides of their mouths.
http://netmail.verizon.com/netmail/driver?nimlet=deggetemail&fn=INBOX&page=12°Mid=100018&folderSelected=INBOX&uidValidity=null&sfield=Num&sorder=ascending&reqReceipt=false
Posted by: tego@verizon.net | February 4, 2013 1:24 PM
Report this Comment
In response to the comment by slicepat17, no I'm not afraid I can't pass the competency test. I just find it seriously redundant since, as a California prepared, I am required to complete both Federal AND State continuing education every year. Plus, the nearest competency test testing site is 3 hours away (6 hours round trip), a tankful of gas ($85), and with the test being 2.5 to 3 hours long, that is an entire day wasted, in my book. Just another way for the IRS to get more money out of us ($160 for the competency test). If I wasn't competent, how do I continue to pass the annual continuing education tests?
Posted by: catkimball | February 4, 2013 1:08 PM
Report this Comment
I find it interesting that the unregistered, non-certified taxpreparer's that rant on about how good they are and how much smarter and honest they are than CPAs, are afraid to take an open book test on only the most basic aspects of tax filing. And it never occurs to them that if all the tax returns they are getting from the well trained and educated CPAs are "wrong" that just maybe they are doing it wrong.
Posted by: TN-CPA | February 4, 2013 12:48 PM
Report this Comment
I have been preparing taxes for over 20 years. I stay on top of things by attending seminars, classes and webinars. I spend many hours every year reading. I feel that even though I am not an attorney, CPA or EA, I do a good job for my clients. My growing client list tells me that. I don't advertise. All new clients are referred to me by satisfied clients. Have you ever read case files from the IRS where they "bust" dishonest preparers? The biggest share of them are CPA's. Why do I have to pay for their greediness? I have no problem with required CE or with the PTIN requirements. If they want me to take a test, at least make it convenient to me. I live in a very small town. The closest testing center is over an hour away. I also do bookkeeping for a lot of very small businesses, so arranging to take the test so far away is inconvenient and costly. I am hoping this will be my last year doing taxes. The IRS is slowly putting the burden on the preparer and not the taxpayer. I don't audit every number clients bring me, but am beginning to think I am going to have to start. How happy will they be when their bill is twice what it normally is?
Posted by: rjlee23 | February 4, 2013 11:26 AM
Report this Comment
Good comments by SNAFU, that $500 penalty is going to be used with regularity. Since I don't want to be a detective; I am limiting my EIC returns to those few that I have; no new EIC returns until the dust settles.
In reading comments from several orgs that I get emails from, I've noticed that we tax preparers are quick to criticize others work. Many years ago, I was watching the Woods Bros repair lathe & plaster. I thought that they were criticizing the original work. One brother said," Oh, no sir, we would never criticize another man's work, cause we weren't there when he done it." Those were wise words.
Posted by: walthm | February 4, 2013 11:24 AM
Report this Comment
To the Unknown comment - could not have said it better. I have not taken the test yet (but am planning to) I do have my PTIN and I have done my continuing education.
Posted by: jtabh | February 4, 2013 11:20 AM
Report this Comment
I truly believe that the IRS was attempting to get all individuals that prepare returns fraudulently out of the picture. They give the rest of us - who play by the rules - a really bad name.
This is my livelihood any my reputation is very important to me and my clients. They are aware of all of the continuing education that take each year, above and beyond the required units by either the IRS or the accounting organizations that I am a member of.
There are a few companies out there that are our best customer. Most of my new clients are clients that have been audited by a supposed reputable preparer who is not open year round but only during tax season.
For the judge to allow this to even go to court - is utterly ridiculous to me - if you sign the returns that you prepare you should have no problem taking this test. If you are one of the individuals that does not sign returns that you prepare but charges a fee for doing so - you are already breaking the law and I can understand why you do not feel that someone should tell you what you have to do in order to prepare tax returns.
I also believe that you get what you pay for.
Posted by: FoxyLady | February 4, 2013 11:19 AM
Report this Comment
SNAFU - Tax factories ARE tax preparers and therefore should ask those questions. As a matter of fact, many of the culprit tax preparers are the spawn of tax factories, because they have not been properly trained. I ask those questions of those who are not known to me because I for one do not wish to be a part of someone's schemes. I always tell my clients you do not need to pay someone to do your tax return incorrectly. You can do it yourself for free.
My experience with those who qualify for EITC is that they want the refund anticipation loan - MONEY NOW! I no longer offer those products to deter the schemers. If someone legitimately qualifies, I refer them to a VITA site, since they qualify for free tax services anyway. If they still want to pay me and are willing to wait the 7-16 days, I will prepare them. Oftentimes, these same people have been misinformed by TAX FACTORIES about the process.
REMEMBER, we prepare tax returns to help those wishing to be in compliance with the tax laws in the first place. So, the IRS is deputizing us because we VOLUNTARILY took on the task.
Posted by: Unknown | February 4, 2013 11:14 AM
Report this Comment
I respect the need for regulation of Tax Preparers. We have a responsibility to our clients to exercise due diligence in acquiring the proper knowledge to best serve their needs. This knowledge can not be gained simply by purchasing and using tax preparation software.
The problems with the IRS requirements are the costs associated with CPEs and testing. The costs for acquiring the CPE credits range fron $40 to $400 depending on the provider. If my 1040A preparation had a cost variance that great, I would be fined and labled a predator. The $116 for testing seems extravagant, give the fact that we've already paid $63 for a TPIN. Would it not make more sense to certify me for business returns which involve a lot more tax accounting and investment knowledge.
I have been pushing for regulation of preparers for some time. I believe that the regulations and enforcements should come the the individual state Accountancy Boards. California had such a system in place when I started in 1986 and it worked for me.
Posted by: ElanaFrans | February 4, 2013 11:13 AM
Report this Comment
To ECBender1
What makes you think the IRS program would eliminate incompetent tax preparers? Seriously? You are that naive??? How many attorneys do you know who are truly incompetent? Yet the passed the Bar and they prepare taxes!!!! Quit being so high and mighty because you are an EA. There are also a lot of you whose returns we have to fix during the tax year. I have been doing this for 30 years. No one can claim to be perfect and it will take more than an exam to get rid of those who prepare taxes not knowing what they are doing! Get off the Tax Prepares back! It's getting old! "He who lives in a glass house should not throw stones!" If you are so perfect maybe Obama should nominate you The Treasury Secretary! Oh.... wait...the guy Obama nominated Treasury Secretary when he first got elected was the one who had cheated on his takes...oops! So much for Perfection!!!! He was a tax Preparer...He prepared his own taxes...using Turbo Tax and blamed the program for the blunders in his return!! Go figure!
Posted by: SNAFU | February 4, 2013 11:03 AM
Report this Comment
So in order to cut a person's hair you are legally required to get a certification, but not to prepare people's taxes. No wonder so much tax fraud is going on in this country. I don't care how long people have been preparing taxes, someone can do something wrong a LOT - that doesn't make them an expert.
Posted by: jbFromOrlando | February 4, 2013 11:01 AM
Report this Comment
As one who has been preparing taxes for over 25 years, I am appalled that ANY ONE tax preparer would balk at the IRS for being required to prove his/her ability to prepare SOMEONE ELSE's tax return!
For that attorney to make the comment that no one should be forced to get a "government permission slip to earn a living" is ridiculous! Where did he get his license to practice law? A gumball machine?!
The IRS is taking steps to protect TAXPAYERS! They are not obligated to protect the tax preparer! How many taxpayers do we serve who have been victimized twice - first by the idiot preparing their return, and then by the IRS demanding penalties and interest on the mistakes made by that same idiot? While there are many taxpayers and tax preparers who try to scam the process, there are equal amounts who just trust the wrong preparer. Those preparers should be held accountable and I for one applaud the IRS for attempting to better educate the taxpayer. The requirement says to the taxpayer that the IRS is trying to cut out the number of fly-by-night tax "services" by holding the preparers more accountable.
Sure, the approach taken has some holes, but it is a step in the right direction. For less than $250, I have been doing what I have been doing for the last 25 years...educating myself on the current tax laws.
I want the taxpayers I serve to leave me educated, compliant, and satisfied. After all, they do not have to use my services.
I always say a fool looks like a genius to an idiot! Take the test, stop griping, and set yourself apart from the foolish tax preparers out there!
Posted by: Unknown | February 4, 2013 11:00 AM
Report this Comment
I believe that all the negative posts regarding the RTRP testing are from individuals who obviously don't believe that they would be able to pass this test. If you have all the experience that you say that you do, then what's the problem. And another thing there is nothing wrong with keeping up with the required annual 15 continuing Education Credits. New laws and changes happen all the time, not just within the IRS, but everywhere. But, I guarantee you that this ruling is going to be temporary,because if you guys think that the IRS isn't going to fight this all the way then you've got another thing coming.
Posted by: slicepat17 | February 4, 2013 10:55 AM
Report this Comment
The Judge did the right thing...Those who need to be educated and get the CE go for it, you dont need to tell the whole world how good are you by fixing so many returns.. The point here is ? are they allowed to impose these regulations? do they have the authority to do so? off course not, and that is why the judge did not allowe it.. CE of 15 hours is very good and helpfull, but to pay $200 for a self study course, it is too much. Exam fine with me..but need to be for free, and the course too.
I support the Judge..He did the right thing..
Posted by: hjubran | February 4, 2013 10:53 AM
Report this Comment
Has anyone filled out any forms (EIC-Sch C and so on...) yet? Has anyone noticed the threatening message at the end of most (if not all) forms worming the Tax Preparer that there will be a $500.00 fine for "each" inaccuracy in the form or each "box" not checked? Have you noticed that the way the forms read the IRS pretty much "deputized" Tax Preparers, and, since every one must use forms approved by the IRS, they have also "deputized" CPA, Attorneys, EAs, Tax Attorneys and absolutely everyone who prepares taxes for a fee into doing the work their auditors should be doing? Some tax payers actually feel they are being harassed by the IRS because, especially in the EIC situation, they have to go out of their way to produce documentation to the tax preparer. According to those forms, asking a question and document it is not enough anymore. The tax preparer is made to ask and obtain proof of whatever he or she is inquiring about and tax payers don't have the time to run around getting "School Records" "Church Statements", "Medical Records" and so forth....and the list is long... just to get their taxes done! Furthermore, if you don't check the box that says you have acquired the documentation requested by the IRS, copied it and put it in you records, the program will not let you e-file the return because it counts it as an error! I also understand, from a person who went to H&R Block to get her taxes prepared that, when it comes to those requirements H&R Block is ignoring the demands from the IRS regarding the documentation we have to acquire...(yes even for the earned income credit) and so far getting away with it. Are the Tax Factories not going to be penalized like the rest of us? When the word spreads that the tax prepares are asking a lot of question and demanding documentation in writing and the Tax factories are not.... That's when the possibility of loosing clients becomes real. People don't have time to run around after documentation when most of them have more than one job and more than one child! I guess that's when we should thank the IRS once more for curtailing our business even after they took most of the summer from some of us so we could abide by the rules they were not allowed to set! How wrong is that??? The EIC is a big problem but the IRS and Congress created the problem and they make it bigger every tax season. It would be not only right, but also just, that the IRS would hire its own "deputies" (auditors) to police the problem. The IRS collected a lot of money from all of us the past couple of years. It can use that money to hire auditors and not put us in the position to police the tax problems they themselves created! We do the best we can to make sure the information we are given is true and correct and make sure the tax returns are prepared correctly and credits are not abused. To put us in the position to have to harass our clients for superfluous documents we otherwise would not need because we know the tax payers are being truthful is just wrong! Those who want to cheat will find a way to do it no matter what or, just go to the Tax Factories that abstain from following the rules and regulations and get away with it! Or was this their intention all along??? Help the Tax factories by making it easier for them to get the business and consequently make it more expansive for the tax payers? Seriously??? I am disgusted!
Posted by: SNAFU | February 4, 2013 10:47 AM
Report this Comment
I, for one, am thrilled with the ruling, but only in part. And yes, I support the PTIN requirement. Living in California, I have been required to complete annual continuing education for many years. It's not that expensive (between $30 and $90 for a full Federal and California State exam). The plus is that they mail you the test and you can complete the studying and exam at home or in your office. The part of the ruling I'm thrilled with is the kobosh on that stupid, redundant RTRP competency test ($160 + a tank full of gas to travel to the testing site). I believe the court erred in not separating the preparer requirements and ruling on each apart from the others: PTIN, yes; continuing ed, yes; RTRP competency test, no. AND, ALL preparers, including big tax house employees, CPA's, tax attorneys, or anyone who signs their name as a preparer on a return, should have the same requirements. I have amended numerous returns prepared by accountants, tax houses, and retired IRS agents.
Posted by: catkimball | February 4, 2013 10:35 AM
Report this Comment
As a tax consultant who has been in the field for 30+ years, I believe tax preparers should be licensed and required to take continuing education. However, this should be a States Rights issue. I practise in the state of Oregon which requires 30 hours of CE and has two levels of licensing. We have a state tax board that oversees the practioners and will impose penalties and withdraw licenses when needed. The IRS looked closely at Oregon for their model in setting up their testing program. I believe the state licensing programs are a better program as they include the tax law requirements of each specific state that has a state income tax program. I don't think the IRS program is broad enough. And it certainly is duplicating requirements that are already in place for many states who already license tax preparers.
Posted by: sueschwab | February 4, 2013 10:24 AM
Report this Comment
The Ruling is fine, I totally agree with the PTIN registration. However, all preparers should be held accountable. CPE credts should should not be discouraged. Preparers should also be able to answers questions asked by the tax payer. Being in the tax preparation business for years does not mean that the preparer is up to date on all the current changes/materials. Over the years, I have filed numerous Amended returns and wonder why some of these individuals are allowed to file returns on behalf of tax prepares. Someone should have an oversight of all preparers. The CPA's have the AICPA. EA's have their Org. Both of these org. require CPE.
Posted by: permanand | February 4, 2013 10:16 AM
Report this Comment
So we are staying with what we have, any one who can breathe can prepare US income taxes. This is not the way to go, getting tested to show everyone getting paid at least knows the basics and is continuing to keep up with new regulations. I dont understand this country sometimes, I dont like the fees I dont like to take the time for continuing education but if is going to weed out all the garbage out there I am all for it.
Posted by: jac25 | February 4, 2013 10:04 AM
Report this Comment
The judge in this ruling is way off base, and anyone supporting the decision is as dumb as a stump. Do you REALLY want unregulated tax preparers working for you? Do you REALLY want unregulated tax preparers preparing taxes they neither have the education, expertise or incentive to keep up on current regulations to do? This profession has taken many hits over the years, and the IRS regulations are the ONLY way to ensure compliance and proper preparation within the code. If I were not already an Enrolled Agent, I would becom3e one anyway, because this is the only way I can guarantee to my clients, current and future, that my skills remain current, and I do my best for the clients I happen to prepare returns for or represent against the IRS and state governments. I despise anyone that feels non-regulation promotes accuracy and compliance with regulations. If you don't want to be regulated, get out of the tax profession.
Posted by: ECBender1 | February 4, 2013 9:52 AM
Report this Comment
LolaZunker - that's exactly the point. Your hairdresser and nail tech should not have to have special licenses or testing, either! You like the work they do, you continue seeing them; if not, you find someone else. Jeez - a test to cut hair or trim nails. Thank you, thank you, Institute For Justice! I suggest donating your next PTIN tax to this organization, as I did. How many times do I need to pay for a number I've been using for ten years?
Posted by: taxshack | February 4, 2013 9:49 AM
Report this Comment
My hairdress and nail tech have both been tested and have to do continuing education so I think tax preparers should also have to comply. I passed the test and did my continuing education and have no regrets.
I have been preparing taxes for over 40 years and am amazed at some of the things uneducated prepares tell people that they can deduct and I have filed many amended returns to fix errors and problems caused by people who THINK they know how to complete a return.
Posted by: LolaZunker | February 4, 2013 9:38 AM
Report this Comment
The Institute for Justice is one of the truly great organizations standing up for civil rights. Please support them with a donation (tax deductible, of course!).
Posted by: Skipper50 | February 4, 2013 9:20 AM
Report this Comment
This ruling will do nothing more than demotivate tax preparers to stay current on new, updated, and revised tax regulations. Is 15 hours of CPE really that burdensome to prevent mistakes on tax returns that may cause innocent taxpayers substantial sanctions and financial devastation?
So many of these comments talk about the unfairness of having to take minimum education credits - meanwhile, tax preparers who are not CPA, EAs and Attorneys are not penalized, and are not accountable for careless, sloppy, and egregious mistakes caused by lack of knowledge of tax regulations, which result in major problems for the tax payers they "help."
I do not believe you need to take CPE class to be an effective tax preparer - experience goes a long way. BUT, these tax scams artists and swindlers have basically ruined it for everyone else. It does not matter how long a person has been preparing tax returns, if they have not kept up on the tax regulations, their experience is worthless. At the same time, is it really so over-burdensome to take a few continuing education classes to stay abreast of tax regulations - considering the potential ramifications to tax payers.
Maybe tax preparers with 5+ years experience should be allowed to take the exam, and waive the educational requirements, but there MUST be an exam that tests the minimum knowledge of tax preparers to weed out those who are not qualified. Conversely,, if the preparers do not want to take such an exam, they should have to appear at the audit and substantiate their work - otherwise they should be financially liable for their mistakes.
Posted by: admin@GoldingTaxSolutions.com | February 2, 2013 9:14 AM
Report this Comment
Thank you IJ for standing up for Liberty. Maybe there is hope against tyranny. Thank you plaintiffs for having the courage to stand up for us. Congratulations taxpayers. You will still be able to go to the same guy you've been going to for 20 years and it will be reasonably priced as always. Thank you Judge for making a sound decision based upon fact and law rather than feelings and fiction.
Posted by: hisexcellency | February 2, 2013 8:55 AM
Report this Comment
Add Your Comments...
Already Registered?
If you have already registered to Accounting Today, please use the form below to login. When completed you will immeditely be directed to post a comment.
Not Registered?
You must be registered to post a comment.