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Taxpayers Cheer Move to Regulate Tax Preparers

Washington, D.C. (February 17, 2010)

Taxpayers overwhelmingly agree with the Internal Revenue Service’s plans to require tax preparers to meet competency and ethical standards, according to a new report by the IRS Oversight Board.

In the report, 78 percent of those surveyed indicate that it is “very important” that return preparers meet standards of “ethical behavior,” while 73 percent believe it is very important that tax preparers meet competency standards. The numbers are in line with findings from a 2008 survey by the board.

While the survey did not explicitly ask about the IRS’s current plans to require tax preparers to register, take continuing professional education courses and be tested, 55 percent of taxpayers said it would have a “great deal of influence” on them if the preparer is subject to regulations or licensing by a government entity, either federal or state. That’s compared to 39 percent who said there would be a great deal of influence on them in choosing a preparer if the preparer is subject to regulation or licensing by an industry association.

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“Requiring tax preparers to register and verify their competency may be one of the most important steps the IRS has made in the tax system in our lifetimes,” said IRS Oversight Board Chairman Paul Cherecwich in a statement. “A tax return prepared improperly or fraudulently can have negative ramifications for years for an unsuspecting taxpayer — and it’s clear from the board’s survey that Americans know that.”

The survey showed a reduction from 2008 levels in the importance and likelihood to use tax assistance services from the IRS, however. There was an eight-point drop from 78 to 70 percent among those who felt a toll-free telephone number to answer questions is “very important.” The board is concerned about recent reductions in IRS toll-free phone service levels as the demand for customer service continues to grow from taxpayers seeking answers about new and extended tax credits.

There was a similar drop in taxpayer attitude from 2008 levels about one-on-one assistance, including offices where taxpayers can meet with an IRS representative, as well as a five-point drop in the number of taxpayers surveyed who said it would be likely for them to visit a Web site that would provide them with information. The board speculates that toll-free telephone service has such an important role in affecting taxpayers' attitudes about IRS service that a decline in telephone service may influence taxpayers’ attitudes toward other IRS service channels, such as visiting a Taxpayer Assistance Center or using its Web site.

Only 10 percent of those surveyed believed that the IRS devotes too much of its resources to customer service programs and not enough to its enforcement activities. Almost half (47 percent) believe the IRS maintains a proper balance between service and enforcement.

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