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

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.

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