AICPA Says IRS Voluntary Tax Preparer Certification Program Is Unlawful
The American Institute of CPAs has sent a letter expressing strong concern with the Internal Revenue Service’s proposed voluntary certification program for tax return preparers, saying it “would cause significant legal problems that may ultimately frustrate the IRS’s goals, confuse the public, and lead to litigation.”
The AICPA expressed its concerns to IRS commissioner John Koskinen in a meeting and letter last month, but has increased its level of concern in the latest letter (see AICPA Opposes IRS Voluntary Tax Preparer Certification).
In a letter Tuesday to Koskinen, AICPA chairman Bill Balhoff and AICPA president and CEO Barry C. Melancon wrote, “We have repeatedly expressed to you and your colleagues that our members have very significant concerns regarding a voluntary certification program and urged the IRS to have a formal comment period to obtain and consider the public’s views prior to moving forward. However, it is our understanding that the IRS has no intention of slowing down or considering viable alternatives. Therefore, we feel compelled to consider our next steps, and to raise more formally our legal and policy concerns with the IRS’s current path.”
Under the proposed voluntary program, tax return preparers would receive an IRS certificate for display in return for completing a continuing education program that includes a comprehension assessment.
The AICPA’s letter emphasizes the following points:
First, no statute authorizes the proposed program;
Second, the program will inevitably be viewed as an end-run around Loving v. IRS, (a federal court ruling rejecting an earlier IRS attempt to regulate tax return preparers);
Third, the IRS has evidently concluded, in developing the proposed program, that it need not comply with the notice and comment requirements of the Administrative Procedure Act. This is incorrect; and
Finally, the current proposal is arbitrary and capricious because it fails to address the problems presented by unethical tax return preparers, runs counter to evidence presented to the IRS, and will create market confusion.
Describing the proposed program as “unlawful and improper,” the June 24 letter stated that it is essential that any regulatory approach instituted by the IRS to address this issue has a firm legal basis and reflects sound policy. “We continue to believe that additional regulation of tax return preparers might yield significant benefits and that the IRS can achieve these objectives while remaining consistent with Loving and other statutory limitations on the IRS’s authority,” the letter stated.
“We have sought to work with the IRS to achieve workable solutions to regulate tax return preparers and protect the public, and we stand ready to continue these efforts,” the AICPA wrote.