Advertisement

  Stock Sponsor
Click here for full stock listings


Published: June 8, 2009 3:00 a.m.

IRS weighs license rules for tax preparers

Stephen Ohlemacher
Associated Press
Advertisement
Locally
The director of a Fort Wayne-area accounting firm with two offices said he favors the IRS proposal.

Daniel E. Hodges, a certified public accountant with Compass CPA Group, said he’s not aware of any law that prevents people from hanging out a shingle and preparing taxes for pay. Hodges, whose firm has offices in New Haven and Angola, said people wanting tax returns done should use a CPA or at least an “enrolled agent” – someone who has taken an exam with the IRS and proved she knows the rules.

CPAs, Hodges said, have to take about 150 credit hours of college, which is nearly the equivalent of a master’s degree. They also have to have practical experience and pass a national exam.

“It really separates those who know what they’re doing from those who don’t,” Hodges said.

WASHINGTON – The IRS wants to start regulating paid tax preparers used by more than half the nation’s taxpayers in an effort to reduce fraud and errors.

New rules could require education and training as well as licensing for people who get paid to prepare returns, IRS Commissioner Doug Shulman said Thursday.

“In most states, anyone can charge to prepare tax returns regardless of training, education, experience, skill, licensing or registration,” Shulman said. “Virtually anyone can set up a tax return business.”

Shulman said most tax preparers provide quality work, but some are poorly trained or unscrupulous. The IRS, however, can’t say how many fall into either group because the agency doesn’t track the number of complaints filed against tax preparers or their outcomes, according to a report issued in February by the Treasury Inspector General for Tax Administration.

The IRS doesn’t even know how many people or companies prepare returns for taxpayers, Shulman acknowledged.

From 2006 through 2008, the IRS initiated more than 600 investigations of fraud among tax preparers. During that time, 356 tax preparers were convicted, with more than 80 percent of them sentenced to prison, home confinement or electronic monitoring.

But when the IRS detects a fraudulent return, it’s the taxpayer – not the tax preparer – who must pay the additional taxes, interest and any penalties, according to the IRS.

Shulman said he will seek suggestions for new rules from the industry and consumer groups before making his proposals to President Obama and Treasury Secretary Timothy Geithner by the end of the year. The proposals could include new regulations or laws.

“I want to enter this with an open mind,” Shulman said. “For me, everything’s on the table.”

– Lisa Green, The Journal Gazette