The Internal Revenue Service wants ordinary taxpayers to offer suggestions on how to improve tax preparer performance.

Last month, IRS Commissioner Doug Shulman announced plans to develop a comprehensive set of proposals by the end of the year to ensure consistent standards for tax preparer qualifications, ethics and service (see IRS Plans to Step up Tax Preparer Regulation). The IRS later announced a series of public forums, beginning in Washington, D.C., on July 30, to gather input from various groups and organizations (see IRS Schedules Tax Preparer Regulation Forums).

The IRS has now issued Notice 2009-60, which asks members of the public to provide suggestions on the new standards that tax preparers should meet.

“We are casting a wide net and seeking comment from not only tax preparers and the industry, but also from the general public,” said Shulman in a statement. “We encourage a wide range of people, including taxpayers themselves, to give us their ideas and suggestions.”

More than 80 percent of taxpayers use either a paid preparer, or third-party software, to prepare their annual tax returns. Professionals who represent clients before the IRS, including attorneys, accountants and enrolled agents, are already subject to IRS oversight under Circular 230. But under current law, a much larger group of return preparers are not.

The IRS said it is particularly interested in any comments regarding:

•  What types of individuals, entities and professionals currently work as tax return preparers?  How are their tax return preparation services currently monitored or regulated by professional organizations or the government?  How could this monitoring and regulation be improved?

•  How do differences in regulation and oversight affect how the various groups of tax return preparers interact with the IRS and taxpayers?

•  Is there a minimum level of education and training necessary to provide tax return preparation services?  If so, who should be responsible for ensuring that a tax return preparer meets this minimum level and how should that be done?

•  What, if any, service and outreach should be provided to tax return preparers and taxpayers?  Who should provide (and bear the costs for) these needed services?

•  Should tax return preparers be subject to a code of ethics, and, if so, what specific behavior should that code promote or prohibit?  How would that code of ethics interact with existing ethical standards that may already be applicable?

•  What, if any, responsibility should the firms or businesses that employ tax return preparers have for the conduct of the individuals they employ?

•  What, if any, responsibility should tax return preparer professional organizations have for the education, training and conduct of their members?

•  If tax return preparation services should be regulated, what, if any, special regulatory provisions should be made for individuals who are already tax return preparers, licensed attorneys, CPAs, enrolled agents, or software providers?

•  What, if any, additional legislative, regulatory or administrative rules should the IRS consider recommending as part of its proposals with respect to the tax return preparer community?

The IRS said that written comments must be received by Aug. 31, 2009. They should be submitted to CCPA:LPD:PR (Notice 2009-60), Room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, D.C. 20044, or e-mailed to: Notice.Comments@irscounsel.treas.gov. E-mail comments should include “Notice 2009-60” in the subject line.

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