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Practitioners eye preparer regulation legislation

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Bills to allow the IRS to regulate tax preparers continue to be introduced, only to falter on the way to becoming law. Maybe H.R. 3330, the Taxpayer Protection and Preparer Proficiency Act of 2019, will be more successful — or at least Neil Fishman, national president of the National Conference of CPA Practitioners, hopes so.

The bill was introduced on June 18, 2019, by Congressman Jimmy Panetta, D-California, and Congressman Ted Yoho, R-Florida. It would allow the IRS to require minimum standards for paid tax preparers. Senate Finance Committee Ranking Member Ron Wyden, D-Oregon, and Senator Ben Cardin, D-Maryland, have introduced a companion bill, S. 1192, in the Senate. NCCPAP supports both bills.

Although the Senate bill currently has been sponsored only by Democrats, Fishman said he hopes it will eventually pick up bipartisan support, as has the House bill. “I like to think that members of Congress will realize that this bill will support American taxpayers,” he said. “The most important document that Americans have prepared each year is their tax return, and you would think that if they engage someone to prepare it, that person would be competent and up to date with changes in the tax law.”

“We consider this to be important legislation because there are many tax preparers who are neither licensed nor regulated by any government authority, state or federal,” Fishman said. “These individuals lack the requirements to keep up with changes in tax law and the knowledge to put tax legislation to work for the taxpayer’s advantage. CPAs, attorneys, and Enrolled Agents are all regulated — either by the IRS, state boards, or a state department of education. If CPAs, attorneys or Enrolled Agents were to commit egregious acts, taxpayers can file a complaint with these regulatory bodies, who can then impose disciplinary actions. For those not credentialed as such, there is no redress for the taxpayer.”

NCCPAP summarized H.R. 3330 as follows:

  • It restores the ability of Treasury and the IRS to set federal standards of tax practice for all paid return preparers.
  • It requires that certain preparers meet the following minimum competency requirements, by obtaining a preparer tax identification number; satisfying annual examination and annual continuing education requirements; and completing a background check.
  • It gives the Treasury the authority to require preparers to include PTINs on returns, and to rescind a PTIN if a preparer is incompetent or disreputable.
  • It requires a GAO study on the sharing of information between the Treasury Department and state regarding PTINs issued to paid return preparers and preparer minimum standards.

NCCPAP supports the legislation because the absence of standard leaves many taxpayers vulnerable, according to Fishman.

“When one has to pay tax, the liability should be no greater than it has to be,” he said. “There are a lot of things in the Tax Code that are black and white, but depending on the situation, many are the proverbial shades of grey.”

For those concerned that an additional certification might lessen the competitive edge of those already a CPA, attorney or EA, Fishman said, “There’s plenty of work for all of us. And don’t you think taxpayers deserve to know that the person they’re using is competent? A barbershop and a beauty parlor are more regulated by states than tax preparers.”

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Tax preparers Tax preparation PTIN Tax regulations NCCPAP IRS Treasury Department