The American Institute of CPAs has written to the IRS asking the service to rely on the existing Circular 230 penalty structure for regulating CPA tax preparers rather than impose a new one.
IRS Commissioner Doug Shulman announced in June that the service plans to overhaul regulations for tax preparers to ensure uniform and high ethical standards of conduct. The IRS has been meeting with various constituent groups, including the AICPA, to get their input. Michael Dolan, the chair of the AICPA IRS Practice and Procedures Committee, gave a statement at an IRS forum on July 30, and the institute has now followed up with a set of answers to supplement his statement.
In the original statement, the AICPA said it supports efforts to ensure preparers are qualified, ethical and provide good services. However, the AICPA added, It believes the IRS has the necessary authority to regulate federal tax return preparers through the current penalty structure, Circular 230, and implementation of one unique identification number for all tax preparers in order to track all interactions with the IRS, and the AICPA strongly advises against imposing duplicative regulatory processes on CPAs, attorneys, enrolled agents and other professionals already subject to Circular 230.
In a follow-up letter to Shulman, AICPA Tax Executive Committee chair Alan R. Einhorn wrote about a number of ethical matters facing CPAs and the firms where they work. Ultimately it is the individual's responsibility to comply with professional and legal standards, he wrote. However, firms that employ individuals to prepare federal tax returns should require that employees satisfy the professional and legal standards imposed on federal tax return preparers, including compliance with practice standards sufficiently high so as to avoid employee exposure to penalties under Sections 6694 and 6695. Firms should be able to rely on certification or confirmation by the employee that he or she is in compliance with professional and legal standards and, if the employee is a licensed CPA or other licensed professional, that the individual is in good standing with the state licensing authority.
Einhorn also said the AICPA views education and training as something that should be return specific and not mandated. We believe that no set of rules for minimum education and training will meet the diverse needs of taxpayers and preparers, he said. Instead, each preparer should be responsible for ensuring that he has the level of education and training necessary to competently perform the preparation job for which he is engaged.
As for a code of conduct, Einhorn noted that the AICPA has developed and approved its own Statements on Standards for Tax Services Nos. 1-8, and added that they are in many ways conceptually similar to the scope of the Circular 230 standards.
Einhorn has also written to the IRS and congressional leaders on behalf of the AICPA urging them to reform the civil tax penalties imposed on both tax preparers and taxpayers (see AICPA Complains to Washington about Tax Penalties).
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