AICPA supports latest tax preparer regulation effort

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The American Institute of CPAs said it supports new legislation that would regulate tax return preparers.

Last week, Senators Rob Portman, R-Ohio, and Ben Cardin, D-Md., introduced bipartisan legislation to make the Internal Revenue Service more accountable to taxpayers, as well as revive the IRS’s regulation of tax preparers (see Senators introduce bill to make IRS more responsive). A federal court invalidated an earlier IRS program to require competency testing and continuing education of all paid tax return preparers in 2014, ruling that the IRS exceeded its statutory authority when it rolled out the program in 2012. After the Registered Tax Return Preparer program was struck down, the IRS has offered a voluntary program known as the Annual Filing Season Program instead. However, the AICPA has continued to push for IRS regulation of tax preparers, as has the IRS’s National Taxpayer Advocate, Nina Olson.

In a letter to the Senators Portman and Cardin, the AICPA thanked them for the provision of their law pertaining to tax preparer regulation: “On behalf of our members, the AICPA would like to express its support for Section 202, Regulation of Tax Return Preparers, which will help to promote good tax administration and protect the interests of the American taxpayer by protecting taxpayers from incompetent and unscrupulous preparers.”

AICPA Tax Executive Committee chair Annette Nellen wrote in the letter that the bill would authorize the IRS to sanction tax return preparers and revoke their Preparer Tax Identification Numbers, enabling the IRS to “act swiftly and efficiently to stop preparers from continuing to file inaccurate and fraudulent tax returns.”

However, the rights of tax advisors would be protected by the bill, the AICPA pointed out. Before a tax preparer’s PTIN number could be rescinded, the preparer would receive a notice and have the right to a hearing.

“S. 3278 also provides appropriate exceptions from the [bill’s] competency provisions for attorneys, certified public accountants (CPA), enrolled agents and individuals supervised by these professionals,” the AICPA wrote. “We appreciate that you recognize the inherent regulatory regime within which CPAs and other legacy Circular 230 practitioners already practice, as well as the fact that CPA firms must stand, as a matter of licensure, behind the work done by the members and employees of their firms.”

The AICPA commended the senators for introducing the bill. “We appreciate your efforts to ensure a service-oriented, modernized tax administration system that earns the respect and appreciation of both taxpayers and their advisers.”

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Tax preparation Tax regulations AICPA IRS