By Robert Kerr
In defiance of the well-worn adage attributed to German Chancellor Otto von Bismarck ("The less people know about how sausages and laws are made, the better they sleep at night."), on April 28, 2010, a record number of enrolled agents from around the country nevertheless converged on Washington to participate in NAEA's second annual GR Fly-In Day.
Details of their trip are set forth below, but suffice it to say our intrepid group succeeded admirably in their quest to advance the cause of enrolled agents everywhere. In addition to recounting these daring adventures, I have assembled other items that should be of interest to you in this Capital Corner.
Here's the rundown. First, enrolled agents recently stormed the Hill as participants in NAEA's second Fly-in Day. Fly-in days - sometimes called "legislative days" - are opportunities for members of an association to meet personally with their representatives (or, in many cases, their representatives' staffs) to discuss issues of interest to their profession.
Second, NAEA PAC, our political action committee, is showing some impressive strength as it continues to gain momentum in its fifth year. For the 2009-10 PAC year, we have set the bar high. Nonetheless, enrolled agents are always up for a challenge, and I am confident our perfect record in meeting our PAC goal will not be broken.
Finally, IRS continues to push forward on the return preparer review and NAEA has been defending and promoting the interests of enrolled agents. NAEA's then-President Sandra Martin's response to proposed PTIN regulations on behalf of NAEA and all enrolled agents is included along with a few odds and ends you may find noteworthy.
On Wednesday, April 28, 2010, enrolled agents met in Washington, DC for an intensive day of grassroots advocacy. Over fifty EAs attended a morning training session at the Capitol Hill (and Capitol-viewing) offices of NAEA's Federal Legislative Counsel, Jeff Trinca. The session was designed to frame the conversations members would be having with their legislators and to help them find their way around the maze-like Capitol grounds. Fully prepped and armed to the teeth with tax knowledge, each member then attended several scheduled meetings with legislators and their staffs.
On their agenda:
Educate: Make sure the staff and/or Member knows what an enrolled agent is and the services enrolled agents provide within the relevant district and/or state. (As an aside, the capitalized Member refers to an elected representative while the lower case member refers to an NAEA member. Clearly, it is good to be elected!)
Advocate: Advance the position that taxpayers (both individual and business) ought to have the right and opportunity to plan. Many tax code provisions, however, are not permanent (dozens of so-called "extenders" and estate taxes, for instance) and in light of these shifting sands, taxpayers are increasingly unable to make informed decisions.
Discuss: Share that NAEA believes Commissioner Shulman is on the right track with his return preparer program and ask that the Member provide any assistance he might need in implementation.
We grouped the EA advocates into nineteen different teams, each of which had scheduled meetings with two to three different offices. In some cases, the EAs met with their representative personally, while in other cases the EAs met with a staff member responsible for tax issues. During these meetings, the EA volunteers aggressively and thoughtfully advanced the enrolled agent cause, demonstrated beyond any question their tax proficiency, and just plain had a great time in the process.
Why are legislative events like this one important? Aside from constituting a practical lesson in civics and the way Washington works, they serve as one of many tools in NAEA's advocacy toolbox. At the risk of putting too fine a point on it, the more tools we have at our disposal, the more effective we can be in wielding them to our advantage. Further, these events demonstrate--as does our active PAC and our consistent presence at IRS--that enrolled agents are serious about their Washington, DC profile. Fly-in days also help enrolled agents learn how to become active and effective in the legislative process; they also reinforce our culture and demonstrate to others our justifiable pride in the profession and its accomplishments.
By any measure, the second-annual NAEA GR Fly-in Day was a monster success and virtually guaranteed a repeat performance next year. I encourage you to take a look at the NAEA website and at NAEA's Facebook page (which is constantly updated with photos from a variety of association events).
On to the thank yous: Thanks to all those who participated, on their own time and their own dime, as well as to esteemed new President Gina Jones, EA and the ever-diligent Government Relations Chair, Frank Degen, EA. Also, thanks to Alexander B. Thomson, EA, who graciously sponsored us for a splendid end-of-day reception at the National Democratic Club.
In late March, IRS issued proposed regulations modifying IRC Sec. 6109 (Identifying Numbers) and requiring paid preparers to include a PTIN (preparer tax identification number) along with a signature on tax returns and claims for refunds filed after December 31, 2010. These relatively unassuming proposed regs are in fact particularly significant to us in that they are the first in an anticipated series allowing the Service to implement its return preparer oversight program. (For details on the proposed regs, consult the March 26, 2010 [email protected].)
In response to these proposed regulations, Sandra Martin, EA (NAEA's then-President), sent a formal response to IRS [See pp. 8-9 for Sandra's response] on behalf of enrolled agents. In the response, she raised roughly a half dozen issues, including:
- A request for clarification on who qualifies as a "tax return preparer" for purposes of the PTIN requirement.
- A request to accommodate international preparers in the new regulatory regime.
- A request to change the effective date of the regulations should the agency's external vendor (just announced to be Accenture) be unable to meet the aggressive delivery dates.
- A request to rationalize EA and PTIN renewal cycles and to charge only one fee to enrolled agents.
- A request to differentiate between the unlimited practice and preparation rights of current Circular 230 practitioners and the limited rights of newly-regulated preparers.
- Support for fee retention, allowing the agency to self-fund the new return preparer oversight program.
Interestingly, NAEA was fortunate enough to host David Williams, the IRS executive lead on the return preparer program implementation, for a Friday, April 30, luncheon with NAEA state leadership and board of directors. During his lively presentation, which we captured on video and which will be available on our website, Dave explained the phase-in process and fielded a variety of questions. Of note to EAs (and likely in response to Sandra Martin's letter), the agency is planning on addressing enrolled agent concern over paying two redundant fees. This is great news for EAs, obviously, and recognition of the level of oversight and control IRS already exercises over enrolled agents.
Finally, closing a busy two weeks focused on return preparer oversight, NAEA participated in a public hearing on the PTIN proposed regulations. I was privileged to carry the flag for enrolled agents and in doing so testified before a panel of IRS and Treasury attorneys along with representatives from other organizations such as the American Institute of Certified Public Accountants and H&R Block.
So what's next on the return preparer front? IRS is mushing through several proposed regulations (modifications to Circular 230, PTIN fees, and mandatory paid preparer e-filing to name just three) and as the summer progresses, we will be in a position to comment substantively on all these proposals. The agency also selected the vendor that will be responsible for the PTIN database and technology infrastructure and fully expects that program to be online by early September. Every EA must understand that, notwithstanding the fact that EAs will not need to be tested any further than they already have been, they will need to either get a PTIN (should they not already have one) or "refresh" (the term David Williams has used) the one they already have.
Robert Kerr has served as NAEA's Senior Director, Government Relations since 2004. Prior to joining NAEA, Kerr worked on the Senate Finance Committee Oversight and Investigation staff, where he assisted the committee chairman in providing oversight to, among others, IRS, U.S. Postal Service Office of Inspector General, and General Services Administration. He also spent a dozen years in a variety of positions at IRS and is well-versed in a variety of tax administration issues. Kerr holds an MBA from Case Western Reserve University and a BA from Mount Union College.