As the dust settles on the IRS’s push to regulate preparers non-voluntarily, preparers are left to wonder if the RTRP initiative was worth all the work and headlines – and what the initiative’s legacy will be, if any.

About 53,500 preparers became RTRPs, according to IRS data from early 2013; the service has since pulled the numbers from its Web site.

Most preparers, however, agree that the idea moved the profession toward needed regulation to better oversee scamming preparers.

“It was a step in the right direction,” said Twila Midwood, an Enrolled Agent at Advanced Tax Centre, in Rockledge, Fla. “The program helped to ensure that the tax return preparers took basic competency tests permitting them to prepare certain tax returns based on the level of the test taken. It also required them to maintain continuing education to help keep up with the tax law, its changes and complexities. The goal is to prepare complete and accurate tax returns for tax payers. To achieve this, a preparer needs to keep up with these changes.”

“Absolutely” the RTRP initiative was worth the effort, said Stephen DeFilippis, an EA at the Wheaton, Ill.-based DeFilippis Financial Group. “Regulation is needed to make sure the consumer is getting a preparer who’s demonstrated an appropriate level of competence and been required to take CE to maintain and improve on that level of competence.

“The general public at large is unaware that the preparation profession is unlicensed,” added DeFilippis, who in the mid-1990s co-chaired a subcommittee that developed a plan for regulating and registering paid preparers.

“I don’t think it was worth the effort,” said Becky Neilson, of Neilson Bookkeeping in Sheridan, Calif. “Here in California, we’re required to complete 20 hours of CPE, be bonded and have a PTIN. I felt our state requirements were strict enough. Some states are stricter, some less. But even so, there will always be unethical preparers and criminal activity. These are the ones that don’t care and figure they can fool the system until caught.”

Other preparers believe the idea remains the best weapon to fight such a stain on the profession. “As long as it’s known that the IRS does not or cannot monitor the preparers or the ‘self-prepared,’ ” said Delmar Gillette, an RTRP with Economic Planning Services, in Newport News, Va., “there will be a rush on trying to empty the coffers of the U.S. Treasury.”


‘If my plumber…’

Linda Burney Fuhr at Lewisville, Texas-based Owen Lyon & Associates, an EA for 28 years and for 12 years a non-CPA partner at a CPA firm, has had “countless individuals seek my assistance to resolve issues with the IRS that resulted from the incompetent and in some instances downright fraudulent acts of other tax practitioners. For the most part, these offenders have been the unlicensed pop-up offices that appear in January and close up on April 16. I’ve been in favor of some sort of regulatory oversight of the tax profession for years.

“If my plumber, my manicurist and my childcare provider must all obtain some sort of licensing and demonstrate minimal competency in their fields, why should my tax preparer be any different?” Fuhr added. “The public deserves some measure of assurance.”

Three years ago, Fuhr served on the team that wrote the RTRP exam for Prometric. “There were 20 to 25 of us representing a cross-section of our profession: CPAs, EAs; unenrolled preparers and IRS employees. When we began this task, someone from the IRS Office of Professional Responsibility gave us this analogy: When you hand over your car keys to your 16-year-old, you want some level of assurance that while they may not be an expert driver, they at least possess the basic technical skills to not injure themselves or others when they’re behind the wheel. He went on to instruct us that we should craft our exam questions with minimal competency in mind.”

“This test was not intended to deny someone the right to make an honest living,” she added, “but rather simply to ensure they could demonstrate basic knowledge.”


‘Shocked by the pushback’

In a decision issued in February, in the case of Sabina Loving, et al. v. Internal Revenue Service, et al., a U.S. Court of Appeals sustained a federal district court decision and injunction against the IRS prohibiting it from administering regulations requiring tax preparers to pass a competency tests and complete annual continuing education before obtaining or renewing PTINs.

Reaction has varied. The IRS now allows some suspended or disbarred tax practitioners to obtain or renew PTINs and prepare federal returns for compensation, for example, and has launched an initiative to allow preparers to voluntarily register. Some professional groups, including the AICPA and the NAEA, oppose the idea.

Fuhr was “shocked by the pushback and subsequent legal action against the initiative. If we have any pride in our profession, we’d welcome this effort to ensure the quality of services we provide and enhance our public image,” she said. “I still maintain that the RTRP exam and a minimal amount of annual CE are the best means to weed out the unethical – and, in some instances, criminal –- element lurking in the shadows of our profession. Despite this mess with the Loving case, I hope somebody at either the federal or state levels can resurrect this thing.”



Effectively judging the RTRP effort –- and its future, if any –- requires two perspectives, said John Stancil, a CPA in Lakeland, Fla. “From an individual perspective, someone who was diligent and worked to achieve the designation probably feels it was a totally wasted effort. If the IRS resurrects the RTRP or similar program, they should make concessions for those who achieved the designation.”

“Looking at the initiative from a collective view, I had problems with it from the outset,” Stancil added. “As a CPA, the RTRP initiative did not have any direct impact on me. As a preparer, however, I felt that some effort should be made to do something about unethical preparers. I don’t think the RTRP program would have made much headway in that regard. The focus was too narrow. CPAs and EAs worked to achieve a voluntary certification. They take pride in their certification and are, by and large, diligent in maintaining competence. A forced certification won’t carry the pride of one voluntarily achieved. Many preparers forced to become RTRPs would have done the minimum to remain qualified.”

“Certainly the IRS’s intentions were noble and professional and showed great concern for the tax preparer profession and industry, as well as taxpayers’ welfare and treatment by the industry in general,” said EA Stephen Jordan in Salem, N.H. “It just wasn’t the right time or place for it.”

“Those who have the designation earned it,” added Ken Tomcich, an EA with Sak Services in Arlington, Va. “The initiative broadened public awareness of need for preparer credentialing, as well as provided more insight to a complex Tax Code begging for reform.”

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