IRS Fines Tax Preparers $2.4M, But Doesn’t Collect

The Internal Revenue Service has fined tax preparers over $2.4 million in the past two years, but has collected only a fraction of that amount, according to congressional auditors.

The General Accounting Office (GAO) said IRS collected just $291,000, or 12 percent of the penalties due. Less than half of the penalized preparers paid any fine at all.

According to The Washington Post, tax officials told GAO that "they cannot afford to make these low-dollar paid-preparer cases a priority given their responsibility for addressing billions of dollars in uncollected taxes."

The Senate Finance Committee disagrees with the IRS priorities, considering that more than half the people filing tax returns use paid preparers.

"Clearly people benefit from paid preparers, but there are some bad apples in the bunch," said Sen. Charles E. Grassley (R-Iowa), the committee chairman. "The IRS and Congress need to do more to make sure the bad apples are tossed out of the basket."

In 2001, more than 72 million taxpayers used paid preparers. If even a small percentage of them get bad advice, millions may be ill served, GAO said.

You may like these other stories...

Inversions: Loophole Is the ProblemJacob J. Lew, the U.S. Treasury Secretary, published an opinion piece in the Wall Street Journal that "the system has become full of inefficiencies and special-interest loopholes. That...
School tax breaks get House support as Democrats objectRichard Rubin of Bloomberg reported that the House of Representatives on Thursday voted to expand and simplify tax breaks for education as Republicans continue to pass...
Many senior US tax professionals believe that a streamlined audit process will be the top benefit resulting from the IRS Transfer Pricing Audit Roadmap, a new toolkit organized around a notional 24-month audit timeline,...

Upcoming CPE Webinars

Jul 31
In this session Excel expert David Ringstrom helps beginners get up to speed in Microsoft Excel. However, even experienced Excel users will learn some new tricks, particularly when David discusses under-utilized aspects of Excel.
Aug 5
This webcast will focus on accounting and disclosure policies for various types of consolidations and business combinations.
Aug 20
In this session we'll review best practices for how to generate interest in your firm’s services.
Aug 21
Meet budgets and client expectations using project management skills geared toward the unique challenges faced by CPAs. Kristen Rampe will share how knowing the keys to structuring and executing a successful project can make the difference between success and repeated failures.