IRS should enforce preparer competency: IRSAC

IRS headquarters in Washington, D.C.
IRS headquarters in Washington, D.C.

The IRS Advisory Council has issued its annual report for 2018, including recommendations that the IRS be given the authority to regulate tax preparers.

“The IRSAC has urged Congress to provide the IRS express statutory authority to establish and enforce minimum standards of competence for all tax practitioners, including tax return preparers,” the report reads, reiterating, “Taxpayers, tax practitioners, and the Internal Revenue Service all benefit from enforceable minimum standards of conduct for tax practitioners.”

IRSAC also voiced reason to believe that a bipartisan consensus has emerged over the last two years for providing the IRS express statutory authority to establish and enforce minimum competency standards for practitioners.

The report covers such other topics as the IRS budget, electronic third-party authentication, transfer pricing documentation and updating Circular 230. Among its observations:

  • Congress has slashed the IRS budget every year since 2011. The annual budget (adjusted for inflation) is $2.2 billion less (16 percent) than it was in 2011. Due to budget cuts, the IRS has almost 24,000 fewer full-time employees today than in 2010. More than 17,000 of those employees worked in enforcement.
  • The report claims that the IRS does not provide adequate oversight of the Free File program. IRSAC also concluded that the IRS should establish clear short- and long-term goals and performance metrics to evaluate the success or failure of the program. The IRS’s “deficient oversight and performance standards” for the Free File program put vulnerable taxpayers at risk, the committee claims.
  • “Two specific … communication challenges emerged early in the 2018 tax filing season,” the report says. “And while these challenges were unique, they also revealed systemic shortcomings in how the IRS communicates with tax professionals and taxpayers.” The challenges involved real-time communications on tax law and tax filing changes, and coordinating and removing duplication of IRS email communications to the tax professional community.
For reprint and licensing requests for this article, click here.