Asked how the tax preparers would answer the government’s argument, Dan Alban, lead attorney on the case with the Institute of Justice, conceded that the government’s reply brief is the last brief that will be filed in this series of briefs on the government’s request for a stay. “We don’t have an opportunity to respond,” he said. “The ball is in the court’s court now. It’s up to the D.C. Circuit now to decide the matter.”
However, Alban does not believe the government’s arguments will do much to change the original ruling. “I would say that their reply is rather boilerplate and tends to just go through the motions and only responds to our arguments in a rather perfunctory way,” he said. “I doubt that the D.C. Circuit will find it very persuasive. I think if you compare their reply brief to our response, there’s a marked difference in the level of specificity and evidence offered. There’s nothing in their reply brief that gives us pause.”
Alban pointed out that the government’s reply brief did contain one important development, however. In one of the footnotes, it mentioned that the Solicitor General had authorized an appeal in the case, removing one possible obstacle in allowing the appeal to proceed.
Next it will be up to the D.C. Circuit Court of Appeals to set a schedule for further briefings on the appeal. Once the D.C. Circuit sets a briefing schedule, it will receive the record of the case from the District Court, and the IRS would typically have 40 days to file its first brief on the appeal. Meanwhile, both the IRS and the tax preparer plaintiffs will await a decision from D.C. Circuit on the IRS’s motion for a stay on Judge Boasberg’s ruling, which could come at any time.
42 Comments
I am still apalled at the lack of understanding here. 100 years no regulation, Obama elected, the most regulated government starts, then you people think this is all well and good. I disagree. I entered this profession and became a CPA for 1 reason-at the time it was a job guarantee, now after I paid my way and went to school at night, passed the exam with pencil and paper(nothing any of you could consider)and 100 years later up pops Hussein and let's regulate. I have an idea, let's impeachlate!!! Get a grip you guys and just use COMMON SENSE. REGULATON COSTS US ALL IN ONE FORM OR ANOTHER.
Posted by: BRES | March 28, 2013 2:54 PM
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I have worked closely with the IRS over the past 20 years and have watched this issue closely. There are bad apples on every tree, but when 90% of the preparer complaints to the IRS are about unregistered (non circular 230) tax preparers it is clear indicator that something needs to be done. If you are a small honest mom and pop business that stays on top of the tax laws and attempts to do your best to comply with the tax laws you should be welcoming this with open arms. It will drive the public to legitimate tax professionals.
Posted by: Grandj | March 23, 2013 3:32 PM
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Passed the RTRP test June 1, 2012
This has been & always will be a pay to play scheme.Why?
PTINS; Recommended so the preparer didn't need to use their own social security number. Larger firms required their employees to get one. This way if a large number of returns rejected or later audited they knew which preparer completed the return.
EFINS; Require application to IRS. Then a FBI background check, tax compliance review. Professional income tax software vendors check your number with the IRS before activating The software.
Since anyone preparing over 5 returns needs an EFIN could it have been that costly or hard for the IRS to have tracked that information all along? Do they have any data that reflects the checks of each person applying for a license were completed? Does the IRS have any data on making sure that only 5 returns are done through a do it yourself income tax software vendor and internet address? Do the vendors check? There must be some sort of data out there that answer's these questions.
Having worked for a do it yourself tax vendor the company knew it was coming. How? These companies overall response was that it will shut down small businesses & others who refused to pay or take the test. Online income tax software vendors are waiting in the wings dreaming of the day they can start to charge even more outrageous fees for their software.
Meanwhile fraudulent tax returns are being pushed through the online vendor software companies systems while the IRS provides no information on the fraud detection, nor enforcement they have taken against any of these companies. Just the professional prepares.
Posted by: Terrim | March 20, 2013 3:54 PM
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Stop It !!! The online free service is robbing the U.S Blind !! Just put the refund on a debt card and its a done deal !! I'm calling you out Turbo Tax !!!!
The IRS can tell the truth by tracking the bad returns by EFIN. What percentage of those EFIN were the bad AppleS ? Not many cuz the way the IRS went about regulating the tax industry was pathetic.
CPA and EA should be ashamed of yourself !!! You can be more of a crook then the next preparer.
Here is a grand solution. After tax season hired all the long term tax professional to audit cases as a independent !!
We can clean you back log in a second. Why cuz I can smell a bad return..
Stop the madness people !!
CPA of 30 years peace.
Posted by: JDAVIS | March 20, 2013 11:40 AM
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It is not true that the IRS cannot track down fraudulant preparers. All preparers are registered by way of PTIN, EFIN. A preparer could renew their license without proper education hours. Isn't that why the IRS have auditors to catch tax payers fraud along with their preparers? For the simple returns that most of us do, the exam is not necessary. I will however, study to become an EA!
Posted by: lseldow | March 19, 2013 10:34 PM
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Lets get it straight - THe IRS knew that their legal parameters were being consistantly violated by their actions over 4 years ago - but no one has challanged them to date - someone stepped up to the plate and simply said that we will not take these violations of the law and what the boundaries of operations given to the IRS by the congress any more - Go to congress like a good little boy and do things the way other people have to do them - by LAW - asking congress to extend - in essance - their powers and provide the authority for then to regulate the tax industry thru examination process.... its that simple - but little boy is going back to mom instead and stamping the feet in protest - geeee - the rants of a little =child in not used to getting its own way because they know it will be an uphil battle to get congress to grant further sweeping powers - further and this is under the covers rumor - guess who is ready around the corner to steal their candy - you guessed it - TAS - as they are already proving themselves as incompetant as the IRS - guess who just might steal the IRS thunder away - hmmmmm .... and buzzing around the head of the commissioner is that scathing rebuke by the treasury concerning the operations - or lack of - by the IRS and the millions wasted trying to glue things that dont fit together to make things work .... why look at this as a historical event - the toothpick house is fgalling and no one else besides the irs is screaming foul.... sigh....
Posted by: STEVE336 | March 19, 2013 9:32 AM
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I've read the comments and concerns of tax preparers over the years (and here) regarding this IRS preparer-regualtory program, and can appreciate the concerns. However, I've understood the regulations from a different perspective, and used the program implementation over the past four years as motivation for continuous professional development, which has drastically increased my awareness and competency over this period. Offering tax preparation services is not a right, as with driving an automobile. For each of these practices, there should be regulations in place which ensure compliance for the greater good. Look, as tax accountants we don't welcome sweeping changes that alter the way we've operated for years and years, but individually we have to understand that even though WE may be great drivers, the test is still valid/necessary to ensure ALL of those operating a motor vehicle have the basic skills necessary to do so safely. As accountants, we're not new to compliance and ethical standards. To give up a practice and say, "The IRS is forcing me out of business" is an easy out stemming from the fear of change. Change has been/always will be, and in our industry you can either view it as a challenge worthy of overcoming for the betterment of your practice and clients, or mistake the challenge as debilitating and simply give up. I don't care about IRS conspiracy theories and possible motives behind the RTRP program. What I care about is remaining relevant and ahead of the curve in our industry which has been experiencing rapid change over the past decade. This enables me to be the best I can be, and offer the highest quality services to my clientele. Isn't this the point? This IRS regulation is simply a "blip" on my career path, which is much larger than the simplistic mentality that it's "Big Brother" attempting to force small practices (such as mine) out of business. If you feel threatened due to the regulations, you may need to take a look at how in-touch your practice is with the current model for preparation/preparer standards, the needs of your clients, and developing trends within the accounting field. The IRS WILL implement fully the RTRP program, so my suggestion is to use this opportunity to take the EA test, or RTRP exam and view it as an educational opportunity which will add to your value as a preparer throughout your career. If you're thinking, "I've been doing taxes for thirty years, and won't/don't need to learn anything new," you've inadvertently boxed yourself in, within an industry that demands flexibility and a thirst for continuous professional improvement - J
Posted by: Jlillis | March 17, 2013 1:39 PM
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If the IRS is so concerned with fradulent returns then go after the preparers that do that, not all of us. I've been doing returns for 52 yrs. correctly and do not need BIG DADDY to tell me now lets change the GAME. That's kids stuff. Go after the Big 3 Tax firms who claim I WANT TO BE A TAX PERSON. They are incompetent!
Posted by: BOWLINGHO1 | March 17, 2013 9:55 AM
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In my humble opinion, IRS wants to force out of business the tax preparers who have a small practice, just like most mom and pop businesses are forced out. But, in this case it's that IRS wants them out, it's not lack of business.
Most of my clients are retired folks, friends and family who don't want to have to pay the humongous fees H&R Block and others like them charge. They also want to see a person they know, like and have seen,(sometimes only once a year)over the years.
IRS needs to find a better way to regulate tax preparers and not strike down all, good and bad, with one fell swoop. I know there is an ulterior motive,not exactly sure what, but I have a good idea.
If you haven't read the comments by "markwith", you can read them below. He has some good points, worth reading.
Posted by: markwith | March 15, 2013 10:21 AM As a long-time preparer, I have mixed feeling about this issue. I agree that there should be some regulation in the industry.
I have always done tax seminars each year. It is impossible to keep up with the regulations if you don't spend some time and the seminars are a convenience and cost effective method of obtaining this information and you can interact with your peers.
As for the test, this is the reason that I will NOT be practicing next year. I am 65 years old and have worked for H&R Block for 5 tax seasons in the 1980s and 1990s. Upon leaving that group I started my own practice and continue to do returns of clients I have had for 20 years.
To the best of my knowledge, only 2 of my returns have been examined. Both were only questioning the amounts on the forms and I always remind my clients that I am not an auditor and will enter any number they provide to me, however, they need to be aware that if they are audited they will be required to produce the required receipts and document. It is not my job to do the auditing of my client's records.
With the registration system, the IRS will have control of the industry as much as possible. By requiring all preparers to registed, the IRS can produce statistics on the preparer's reliability. My understanding is that they issued thousands of letters to preparers the last two years. I have not received any such letters.
The IRS is not going to get those preparers who will prepare the returns and simply not sign them and charge. Even with this program in place, these people will be difficult to find unless they are reported by their clients. With the education of the public about the new licensing requirements, the clients would be more likely to insure their preparer is a registered preparer.
I prepare returns because I enjoy doing it. As a single person office, I don't have a lot of overhead and can pass on my savings to my clients. If I have to terminate my service, they will be forced to abandon my $30 - $75 typical returns and go to a big chain or an accountant with lots of letters behind their name and pay from $150 - $500 for the same returns.
Make new preparers provisional for the first 5 years and track them carefully. If there are no issues, then make them a licensed practitioner.
Let's get this resolved so I can tell my clients if I will be preparing returns in 2014!
Posted by: markwith | March 15, 2013 10:21 AM
Posted by: joacann | March 17, 2013 8:46 AM
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I sit here reading a lot of the posting. I really wonder who is unethical here. I also have been preparing taxes for 30 years. Taken credit courses and does anyone ever say Thank You. Meaning the government. No all they ever do and want is more rules and money. Taking their silly test is going to stop higher ups. Look at some of the firms they did catch up with. I wonder if the IRS is ever going to see that money from them?? They(IRS) and the government should STOP WASTING taxpayers money and focus on protecting USA.They should choke on what they have done and leave us to business. Not to mention what the hang up is with the 8863 filers, people are still waiting for their refunds. I am thankful I only have one client waiting. But how many has H & R block messed up?? Hum makes someone wonder. They should be fined and punished..don't you think?? And did they follow the law(IRS) nope they just went on ahead and did what they wanted. So who are the crooks here?? And they talk about us professionals taking a test for what, just our hard earned money is all they want ...lets get real people. We should be backing the one who came forward and the IRS should choke on their loss.
Posted by: kawerner | March 16, 2013 9:42 PM
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I have been a preparer for 20 years have never had a problem and value my customers. I have no problems with IRS requirements what they need to do is keep an eye on are those unprofessional returns like turbo tax that people buy or like wise programs and on line competition, because with all that we are not going to make a profit or stay in business for long.
Posted by: angie13 | March 16, 2013 1:00 AM
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I don't know why I consistently see postings on this site that refer to CPAs not having to test and keep up with education requirements. We may not have to do this through the IRS but we have to endure 3 days of testing (not 3 hours). Also, we are required to attend many hours of continuing education every year or two years depending on the state we are licensed with. So we stand up to more rigorous standards through the state licensing agencies than the IRS. Additionally, we pay a lot more annually or bi-annually for our license as well as the annual IRS ptin renewal. Plus we can be reported to the state agencies as well as the IRS if some has a complaint. Just wanted to set the record straight.
Posted by: arizona cpa | March 15, 2013 11:25 PM
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I a professional tax preparer cannot afford $116 they need to find another job. Or are they living on Food Stamps and Medicaid?
Perhaps the Plaintiffs tax preparation practices should be checked out for competence.
And if Lawyers and CPAs can practice Tax Preparation without Educational Credits and Testing, perhaps Tax Preparation Professionals should be allowed to practice Law and Certifications. "What's fair for one is fair for all."
And just one more comment, "Lets get rid of the garbage!"
A vast increase in Correspondence Audits, requesting receipts and letters from Charities and Employers should end a lot of cheating and expose incompetent and fraudulent Tax Preparers rather quickly. No requested info arriving, whamo!
Posted by: tego@verizon.net | March 15, 2013 9:57 PM
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A reply --we in Oregon do self-regulation, that is when we hear about ANY preparer, no matter what letters are behind the name, not signing, no PTIN, no license, poor/sloppy, inaccurate preparation from ANY year, we can, will, and DO report it to our State Board of Tax Preparers, and within 24 hours there is an investigator at that office door. Fines (LARGE ones),plus loss of their license many times (we need one in OR) are very common. We in Oregon felt that we might have been grandfathered in because of the extensive testing, hours required before being able to work on our own,and many hours of reported education every year. So all of the hue and cry about it costing so much made us laugh, since we have to do it every year. And are proud to do so. We do apparently need something national since most other states are too ignorant or lazy to protect themselves. Not what the IRS did or the way they did it though.
Posted by: AliceM | March 15, 2013 8:47 PM
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I have had my own Accounting Practice for 27 years. I also have taken great care to stay up to date with the constant changes in the Internal Revenue Code and related State tax laws. I have passed the RTRP Exam on the first sitting. I do feel that it is essential to provide accurate and professional service to all of my clients. I do not feel that the person that prepares returns for friends and family is necessarily qualified. It has been my experience that most have a basic knowledge of tax code and law and, do not have the depth of experience that one develops on a full time basis over 27 non-stop years. I also feel that there are many and, perhaps a majority, of attorneys and CPA's that lack the competency to be exempted from the requirements imposed by the IRS (pending the current court scenario). Across the board, I feel that the regulation of tax return preparers is an essential part of providing the taxpayers with competent tax preparation, review and, planning. It is my opinion that the level of competence must be raised, considering the complexity of the current tax code. I do not feel that it benefits the taxpayer to be provided with anything less. I also do not feel that it is in the best interests of this country. Quiet frankly, this country needs abolutely competent professionals. Perhaps then, this country would be in better fiscal condition. Perhaps.
Posted by: Robert D | March 15, 2013 8:02 PM
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While I don't have a problem per se with continuing ed or the taking of a test, the continuing ed that I did complete by the end of 2012 had pages and pages and PAGES covering stuff that the average tax preparer will never handle and has no need to know. For example, I will never be figuring what to put on a 1099 for investment companies or banks or what requirements need to be met before putting the figures on those forms. I do not work for large corporations dealing with complicated financial matters that have all sorts of rules about their information returns or other federal forms. If I RECEIVE one of those forms with figures on it, if necessary I will do research and find out what to do with it, but I will NOT be filling it out for the companies involved. I do not need to know where all of those figures came from and whether or not it was done correctly at the source. We might need continuing ed on basic tax matters (many of which we already know, by the way!) We need continuing ed for the tax changes each year, which anybody who does taxes should be finding out about anyway. But we do not need to spend hours and hours on things we will never in a million years deal with. That should be left to the high dollar people who DO need to know those things. A basic continuing ed and tax changes course is all we need to be competent in our field. Anything else is discouraging and time consuming. The time and money I wasted on some of the subjects in my continuing ed course caused headache and upset stomach for both me and my two employees. In thirty years I have never had to know some of those things and I do not expect that to change in the future. I have had clients with degrees in accounting who did not want to tackle their relatively simple tax returns because what they learned in school about taxes was so intimidating that they were afraid of making a mistake. I do not have a degree in accounting but I have spent thirty years as a return preparer and I am very diligent about doing a good job. Go ahead and test me but don't waste my time on things that do not apply to me. If the return is beyond my expertise, I have enough sense to know it and send the client elsewhere. Simplify, simplify, simplify!!!
Posted by: anitamartinez | March 15, 2013 5:11 PM
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The IRS had a solution and gave it up back in the 90s.
Recall that the service had "efile coordinators" (EC) in each region. These people actually visited the ERO offices regularly. The EROs actually helped police the industry. ie: If you had a competitor that was using advertising that was not allowed a quick call & fax to the EC resulted in quick follow up and resolution.
When you see an ERO that is filing with pay stubs, who do you call now? If you see misleading advertising, what hoops do you jump through to report the abuse? Write Dear Abby?
A system that lets preparers help self-monitor will find more problems quicker at lower cost, and may be much more effective than the IRS usual "top down" methods. Every good idea doesn't come out of Washington.
Posted by: wkdavis | March 15, 2013 4:08 PM
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There are problems with all phases of the Tax Preparation field. But here is a problem that the IRS can't fix with their redicoulos new RTPT TEST. An ENROLLED AGENTS FRAUDULENT PREPARATION AND STEALING OF THE TAX PAYERS REFUNDS. This is an example that the IRS should clean up their Enrolled Agents first before making the life miserable for an honest Tax Preparer who hass prepared Income tax returns for 27 years without a single problem. See this IRS case against the Enrolled agent. http://www.irs.gov/uac/Enrolled-Agent-Disbarred-for-Stealing-a-Client’s-Tax-Payments-and-Preparing-Returns-with-False-Deductions
Posted by: godfather | March 15, 2013 3:56 PM
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It is unfortunate that I meet very many "CPA's" who are incompetent. Although they are required to get their CPE hours in yearly, why should they be exempt from IRS testing? If the IRS truly wants to keep "incompetent" preparers out of the public, shouldn't all preparers be subject to IRS testing? I need to understand why a person getting their CPA 40 years ago should no longer have to prove their competency. Aren't we all still required to pass our driver's license tests on yearly or semi-yearly testing terms? Why are just CPA's exempt when all other preparers are subject to testing?
As a 30+ year tax preparer & non-CPA, I have no problem with being required to pass an annual exam. I do however, think that CPA's also need to do the same. If the TRUE purpose of this IRS ruling is to keep incompetent preparers from preparing tax returns, ALL preparers should be subject to these IRS competency rules.
Something to think about...
Posted by: CJ | March 15, 2013 2:52 PM
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The IRS is acting exactly like the bully the American public sees it as: brutal, blunt, bombastic and bigoted. I've done the test, continuing-education and paid all the fees and charges before and during. It's a demeaning and dreadful experience that I learned far less from that the mandatory California CTEC licensing process. At the test facility I was stripped of all my personal property, forced to give my driver's license to strangers (who held it for over 3 hours), patted down by a retired NFL tackle, wanded with a metal detector (which went off and I was patted down again...it was my belt buckle) and then I was locked-down in a closed room for 2-1/2 hours in front of a flickering B&W computer monitor.
What did I learn from all this IRS regulatory abuse? California CTEC tax preparers already over-comply with the IRS standards for continuing-ed, licensing and registration. So the whole RTRP program is totally redundant, way overcharged for and absolutely unnecessary in states that already have licensing, continuing education and testing programs in-place. The entire RTRP preparation, studying and testing programs have NOTHING whatsoever to do with "real world" practice in any tax preparer's office.
The pay-for PTIN addition is simply further confiscation of funds from citizens who happen to be tax preparers. I've have my PTIN since they were available 15 years ago without any charge or change. Now I've had to pay the $64 fee (aka: fine, tax) 3 times in 15 months! This confiscation of our income should also be banned.
In total I spent much of 10 days to 2 weeks complying, pre-testing, reading, studying, driving to-and-fro and enduring Brown Shirt-like abuse as a tax professional at the hands of the IRS and its private-sector cohorts dealing with RTRP and PTIN costs and requirements we already do in California. And paid out over $450 for all the fees, charges and licensing! For what, I ask?
The IRS need to stick to its business of confiscatory collections of the people's moneys and leave these regulations in the dust heaps of stupid, redundant and unnecessary applications of abuse on we who are the professional mediators of their tax income sources.
DH Taxes
Posted by: unitax | March 15, 2013 1:53 PM
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Having unethical or incompetent preparers is indeed harmful, but that doesn't mean the regulations are fair or will solve the problem.
For example, if exemption for CPA's etc. is based on past education, examination, ethics, and continuing education, why were CFP designees (which one of the plaintiffs is) treated differently? They have all of the above.
Even after preparers receive the RTRP designation, they're still treated as "second class citizens". Why are staff supervised by a CPA exempt from their own testing, but not staff supervised by a RTRP? Why can't they represent any client in an audit, instead of only clients whose returns they prepared for only the year in question? RTRP's will all of the responsibilities of being subject to Circ. 230, but not get all the rights of others subject to it.
Its a shame all of this is omitted from the current discussions.
Posted by: cokertax | March 15, 2013 1:50 PM
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I've commented once, but would like to add a comment. This regulation scheme is troubling in a lot of ways, but one thing that I don't think has even been raised is that the IRS without statutory authority has "taxed" or taken money from those people that are required to e-file returns (which saves the IRS a LOT of money in processing costs). When we were required to e-file returns we prepared did we even get a thank you? I didn't get mine. But I paid about $3,000 more in software costs each year from then on. (Maybe they sent my thank you to the wrong address) When I got my PTIN so that my identity wouldn't be stolen by an unscrupulous individual that access to copies of the clients returns for any other reason, did the IRS apologize to preparers for not having thought about that before it started to happen? Don't remember that one if it happened. Has the IRS (given that for the first essentially 2 months of a 3.5 month filing season made any concessions for the final deadlines, even though they have had problems receiving the volume of e-files? Only on farmers and fishermen and that was at the last minute when if was clear that they couldn't process even the paper returns. But here is the real problem. An agency that acts without statutory authority to regulate (control) those that are essential to making the system work at all, will have no problem regulating all aspects of our ability to work for those that pay us - our clients that we are supposed to be working for. If the IRS wants us to work for them they should pay US, not us paying them. And at what point does the IRS regulate taxpayers that prepare their own returns? (After that is where the majority of mistakes are made, not by paid preparers.)
Posted by: SullivanAcctg | March 15, 2013 1:42 PM
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I find it interesting that the comments that support the IRS's plan and "authority" never mention the one real important fact... This scheme was hatched without statutory authority!!! If you are trying to increase compliance with the tax code wouldn't it make sense to require that of the IRS as well? If this is so vital, then get Congress to approve it! It is also interesting that no one seems to see a conflict of interest in the IRS being the authority that would be in charge of the enforcement and standard setting. Does it seem odd that an agency that is more interested in collecting higher taxes would be in charge of determining what the standards of conduct for preparers should be (keep in mind that the IRS has a lot - higher percentage of population than the general public - of employees that are delinquent on their own taxes). Shouldn't that be first between the preparer and the tax payer, and second based on ethical conduct, which is probably outside the competence for the IRS. I have taken an approved IRS ethics course, and found it to be repulsive. The entire course was in what you can and can't do. Some of the things you can do were things that I wouldn't do EVER. So it was simply more rules that had little to do with ethics and more to do with following a flowchart for decision making, which led to somewhat questionable conduct being OK by the rules. That's not ethics. This entire scheme was designed to bring money into the IRS for "enforcement" without having to go through appropriations. Instead of blaming an entire group of people and forcing us all to pay for others misconduct, get your appropriations from Congress and do appropriate enforcement. Then try to make it simple. Them more complex the code is the more ways there are for the unethical (like Timmy Geitner) to cheat. And when someone finds a way to get a refund that they weren't entitled to there will be those that multiply that refund. And by the way last year I took almost 200 hours of CPE. It's impossible to feel comfortable doing returns if you don't learn. But the reality is it should be so simple that a 6th grade student could do it. Let's focus on the real problem. Not try to blame it on those who are trying to do a job helping their clients comply with an overly complex code and an arrogant bureaucracy.
Posted by: SullivanAcctg | March 15, 2013 1:29 PM
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Suspicious Presumption By the IRS Evidenced in Their Own Unprofessional Response. The words chided at the three tax preparers sums up how many of us are portrayed, though we are very good tax preparers who bring in revenue for the US Treasury. and states. An attack on one of us is an attack on all of us. Somehow the IRSs position seems illogical - we prepare taxes because we do care about our country as Citizens, and we want to do the right thing and follow the law. A rushed botched law is what the IRS has put forward based on the suspicion by the IRS that preparers are all unscrupulous - and I find it offensive. There are some yes, and yet again an existing law called Circular 230 covers them (just like the existing immigration laws). So go after them and prosecute them. I am a detailed accountant working towards passing 2 more of the three parts of the EA test. I don't like being forced to drink cough syrup medicine, rather I like to work towards good health. The IRSs flippant response to the $116 fee, the three hour exam, and continuing education hours, plus a PTIN Fee is another reason why our bureaucrats demonstrate their callousness towards small businesses. Add on the hours of preparation for an exam, the already existing compliance for California, the short time frame to comply with the IRS, and maybe you can see the shortness some of us have with the IRS. It's not as if we are just sitting around - we are all very busy trying to work everything into our schedules. A radio station called this type of legislation - legislative oligopoly. To put it very succinctly this regulation is a prohibitive barrier to entry, promulgated by large Block-like companies and CPA firms to squeeze out the small mom and pop businesses and drive them out of business, so that the much larger companies with large lobbying wallets can swallow up more of the market and drive up tax preparation prices. Praise be to God there is at least one Judge that saw it for what it is. Much praise that he put brakes on this botched program being steam rolled down preparers backs, needlessly causing undue harm to legitimate preparers. One would think that a common sense approach such as rotating renewal based on the PTIN number would help to ease a program into existence.
Posted by: antnysang@yahoo.com | March 15, 2013 1:11 PM
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The test is a one time test. Once passed, it doesn't have to be repeated. Why would we regulate hair dressers, but not expect individuals responsible for compliance with our tax code to at least pass a MINIMUM competency test? Maybe regulation won't catch all the bad guys but it will set the stage for stiffer penalties for those who are caught and perhaps add just one more degree of difficulty which averts other bad guys from robbing the taxpayers and government?
In my opinion, reputable preparers who refuse to test are simply fearful that they won't pass. It is not a difficult exam. With a couple of weeks of study, part time, passing the test is entirely possible.
Most other businesses have costs associated with start-up and continued organization. Why should tax preparers be any different?
Posted by: KL | March 15, 2013 12:44 PM
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I have been preparing taxes since the early 1980's. I have a formal education in accounting & tax. Also I have had a PTIN since its inception. Each year I take continuing education classes in both fields of accounting & tax. In my law class our instructor pointed out two things: 1. Laws are about creating standards that all must abide by or face consequences 2. these laws keep honest people honest. Those unscrupulous preparers will find ways around the law. However, the law will ensure a greater number of practitioners will comply with the mandates which will in the end benefit those taxpayers seeking tax preparation services. Yes, CPA's will make mistakes and so will other preparers. This law is not designed to make preparation mistake free but it will hopefully reduce the mistakes.
The issue of fees is really mute. The fees are nominal and the continuing education is minimal. All preparers should have taken continuing education whether required or not. The tax laws change continuously and continuing education provides an opportunity for learning the changes and the proper treatment on the tax return.
I do not have a problem with the registration, testing, and continuing education. If you are a true professional you will not either. It ensures the level of competence in our field. This should have been done a long time ago.
Posted by: carol7496 | March 15, 2013 12:44 PM
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I have been preparing tax returns for 40 years and I live in the State of California. In order to become a tax perparer in California we had to take an 80 hour course with an accredited tax school. At the time that class cost me $500.00 but it was the cost of doing what I loved to do. After we passed the test and in order to continue preparing taxes we have had to take a minimum of 20 hrs continuing ed and register every year with CTEC, the california regulating agency for tax preparers.
I have no problem with the continuing ed or the registration. What I have a problem with is the 3 hour test. I am disabled and sitting for 30 minutes straight is extrememly painful for me and sitting for 3 hours to take a test would be impossible. If the IRS wins and I am forced to take their test in order to continue preparing taxes I will be forced to quit and send my clients elsewhere where they will pay at least double if not more to have their returns prepared.
As I have already stated, I have no problem with regulation, in fact regulation is a good thing.
Posted by: angel32302 | March 15, 2013 12:37 PM
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First of all, I believe that many people who go to preparers who mark the return as self-prepared know EXACTLY what they are doing, and don't care. They get a cheap return filed, and I think they deserve every bit of trouble they get when the IRS questions their return and they have NO backup by the unscrupulous preparer. And I don't think any IRS ads telling people not to go to these preparers will do any good, either.
Nothing the IRS does is going to catch these people. Nothing in the scheme of regulations will do anything to even address the problem. And as for unscrupulous preparers who do sign their returns - there are as many CPA's and EA's being put away for fraud as there are unregistered tax preparers. And isn't there an entire tax franchise (who shall remain nameless) the IRS is going after for fraudulent practices? I'd still like to know how the RTRP scheme would have done anything about that?
Lastly, I am REALLY tired of sanctimonious EA's/CPA's stating that anyone who is against the whole RTRP scheme is obviously incompetent and afraid of taking the test. I've been preparing taxes professionally for nearly 9 years. I've gone to seminars and workshops for updates and additional training for YEARS. I've DONE the tax training for most of the preparers who work for me - and presented tax preparation classes professionally. But apparently it is now unacceptable within the community of my peers to actually expect the IRS to follow the law of this country and obtain legislative authority for any regulatory scheme they decide to put into place. Instead, when I take this legal stance (as did the plaintiffs in the original suit against IRS) I am blindly labeled as "incompetent". All I have to say to that is, if YOU are that ignorant of the legal requirements for IRS to implement regulations, maybe you should be concerned about your OWN incompetence?
Posted by: olivertax | March 15, 2013 12:29 PM
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I would not mind the testing every year if it is in a different area of the tax law or only covering the new tax laws. I do think that just a modified same test such as adding the word "not" to a old question to make it a new question is appropriate. What testing is to be done for those using the numerous self-prepared softwares on the market, such as Turbo Tax , etc. The people doing those self prepared returns do not attend any type of training. EVEN the IRS has a methodology of people to file their own taxes. Where is the testing requirement for those people?
Another part of the recent changes that bothers me is having to pay $63 plus every year for PTINs I have had for 10 years before for free? Why the re-registering? What is the point? Other than to bring in revenue for conventions by IRS personnel in Las Vegas!
Posted by: summerwindtax | March 15, 2013 12:05 PM
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Question:
What is the IRS error rate compared with the unregistered tax return preparers? While the IRS wants to regulate the preparers (and everyone one else it possibly can), it does not want its unauthorized and unlawful expansion of its powers checked. If Congress wants the IRS to regulate all return preparers, then let's legislate the change.
Posted by: Unknown | March 15, 2013 11:42 AM
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I would love to know more about those three tax preparers. So we have to pay $64 annually for a PIN? So it's $120-something to be tested? So what? That's a costs of doing business.
I've been preparing taxes for 37 years, and have taken a minimum of 20 hours each year in CPE. Yes, I took the test, and I didn't whine about it either. (passed)
If it weeds out the kitchen-table preparers who mess up peoples' finances, it will be worth it. We should have been regulated and licensed a long time ago.
Posted by: MizLiz | March 15, 2013 11:30 AM
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While I agree that there are plenty of incompentent, unscrupulous preparers I must say that I have had plenty of unscrupulous tax payers that want more money and if you don't get them more money they will go to the preparer that does get them more money and dosen't sign their tax return. For example here in Kissimmee FL, Carlos Cabrera with CABRERA FINANCIAL has been on the news a couple of times for the same reason. He has cost the IRS 23 million in education credits and HE IS STILL IN BUSINESS! What message does this send to the rest of the tax preparers that are doing the right thing? Unscrupulous tax payers are the ones keeping him in business till this moment. What is the IRS doing to stop this nothing. He has been commiting fraud since 2006.
Posted by: smateos | March 15, 2013 11:21 AM
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I agree with markwith. There has been so many CPAs screwing up this tax season. I had a client that she said he didn't know where to put a 1099-c and put it under other income. I take as many tax seminars that there is out there every year. Having that knowledge is what makes us better tax preparers. They should continue with the education credits as which it does contain some very useful information. There has been companies out there not going by the new IRS rules its a shame that we are going by them and we are losing clients.
Posted by: brandiwomble | March 15, 2013 11:00 AM
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I agree with "markwith", dated March 15, 2013. I would like to see all of this solved. I personally don't have a problem with the testing, etc..... Just my opinion.
Posted by: countrytax | March 15, 2013 10:48 AM
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Most unethical and incompetent tax return preparers don't register and sign TAX returns. Then there are unethical taxpayers who don't provide the correct information. IRS should go after these people to save billions of dollars.
How IRS is going to catch these people by making preparers pass exams and do continuing education. There are many CPA's who do unethical things.
Posted by: IDOTAX | March 15, 2013 10:46 AM
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Just a few comments. First, in reviewing IRS regulations before passing the RTRP exam the one thing I learned was that preparing a tax return was not considered practice before the IRS. The IRS can't have it both ways.
Second, why doesn't the IRS have our friends in the current "do nothing" Congress pass a law that would allow them to continue with the RTRP Program.
Lastly, I passed my RTRP examination on the 2nd of November and I still haven't received my certificate. Mandatory or voluntary, I think I still deserve a certificate for completing the program.
Posted by: srogers365 | March 15, 2013 10:33 AM
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After reading the court ruling, I have to agree with the court that the IRS does not have statutory athority to impose restrictions on tax preparers. The IRS has been trying to get Congress to grant them this authority for over 8 years. My question is, if they have been trying to get this authority and knew they did not have it, why did they pursue this to begin with?
With that said, I do believe that having untested preparers presents a danger to tax preparers. While I agree with another post that indicates the errors go both ways - an error in favor of a tax payer will create a larger refund for them - an error in favor of the IRS will create penalties and interest on the part of the taxpayer. This is a problem, one in which the IRS is attempting to address with their compliance regulations.
I disagree with the plaintiff's statements (that the court upheld) that the certification and CE requirements are a hardship on preparers and will cause many to go out of business. What malarky!!! Testing preparation software is not overly burdensome cost wise ($200?) nor is the testing fee ($105). CE for an RTRP where I live is $295 a year. The maximum initial cost to prepare for the test then is only a little over $300 with an annual cost of less than $300. If this is too burdonsome, I think those preparers shouldn't be in the tax preparation business to begin with.
I believe the cost to the public to have people preparing taxes that are either untrained or unwilling to be tested and certified is much larger than the cost to get it done and show some pride in our credentials.
Posted by: lcslater | March 15, 2013 10:29 AM
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As a long-time preparer, I have mixed feeling about this issue. I agree that there should be some regulation in the industry.
I have always done tax seminars each year. It is impossible to keep up with the regulations if you don't spend some time and the seminars are a convenience and cost effective method of obtaining this information and you can interact with your peers.
As for the test, this is the reason that I will NOT be practicing next year. I am 65 years old and have worked for H&R Block for 5 tax seasons in the 1980s and 1990s. Upon leaving that group I started my own practice and continue to do returns of clients I have had for 20 years.
To the best of my knowledge, only 2 of my returns have been examined. Both were only questioning the amounts on the forms and I always remind my clients that I am not an auditor and will enter any number they provide to me, however, they need to be aware that if they are audited they will be required to produce the required receipts and document. It is not my job to do the auditing of my client's records.
With the registration system, the IRS will have control of the industry as much as possible. By requiring all preparers to registed, the IRS can produce statistics on the preparer's reliability. My understanding is that they issued thousands of letters to preparers the last two years. I have not received any such letters.
The IRS is not going to get those preparers who will prepare the returns and simply not sign them and charge. Even with this program in place, these people will be difficult to find unless they are reported by their clients. With the education of the public about the new licensing requirements, the clients would be more likely to insure their preparer is a registered preparer.
I prepare returns because I enjoy doing it. As a single person office, I don't have a lot of overhead and can pass on my savings to my clients. If I have to terminate my service, they will be forced to abandon my $30 - $75 typical returns and go to a big chain or an accountant with lots of letters behind their name and pay from $150 - $500 for the same returns.
Make new preparers provisional for the first 5 years and track them carefully. If there are no issues, then make them a licensed practitioner.
Let's get this resolved so I can tell my clients if I will be preparing returns in 2014!
Posted by: markwith | March 15, 2013 10:21 AM
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I really feel sorry for the IRS. First, the agency is stuck enforcing an absolutely unspeakable tax code, a thankless job at best. Second, they have mud on their face for having implemented a regulatory structure that has no statutory basis. Third, they wasted all that money and time designing said regulatory structure, money that could well be used on other more profitable endeavors. Life just isn't fair is it?
Posted by: janejohn | March 15, 2013 10:09 AM
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I concur with Pat. "Give me the VAT or consumption tax and get rid of the IRS and the layers of incompetent waste.
Posted by: Liberty1776 | March 15, 2013 9:55 AM
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I had three returns rejected on e-file last year for returns that had already been filed by someone, not myself or my clients. The steps to resolve this with the IRS are a nightmare. I've said it before, concentrate on going after the bad guys that are never going to register, take CE, or pass any test. Give me the VAT or consumption tax and get rid of the IRS and the layers of incompetent waste.
Posted by: PAT | March 15, 2013 9:06 AM
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The article quotes an IRS statement: "The regulations are intended to safeguard taxpayers from incompetent and unethical tax return preparers, who annually cost the taxpaying public billions of dollars. "
While no one may doubt that the public is losing billions of dollars annually to incompetent and unethical preparers, I would like to see the source of that figure, with details. And also: don't incompetent preparers make errors in both directions, e.g. higher or lower tax liability? Is there a bias in the errors of incompetent preparers? Of course, with unethical preparers, there's no doubt.
Posted by: jdboyle | March 15, 2013 7:53 AM
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