Will the Courts Uphold IRS Efforts to License Tax Preparers?
by AccountingWEB on
By AccountingWEB Staff
The IRS is confident that its initiatives to increase regulation of tax preparers will be found legal, despite challenges from opponents.
Last week, IRS Commissioner Doug Shulman, said the new requirements were being implemented carefully and would "help smoke out unscrupulous preparers." The regulations in question would require certain preparers to pass a new competency test and complete fifteen hours of education each year.
"I'm very confident not only is everything we're doing going to be seen as legal, but more importantly, everything we're doing, I think, is going to benefit the American people," Shulman said at the National Press Club on April 5.
Under a statute allowing the Treasury Department to regulate the work of representatives who come before it, the IRS has said it has the authority to implement its initiatives. "I'm very confident not only is everything we're doing going to be seen as legal, but more importantly, everything we're doing, I think, is going to benefit the American people," said Commissioner Shulman.
"It's a small number of people that are unscrupulous, but those are people that we need to make sure we're focused on so that taxpayers get good treatment," said Shulman. And, with roughly 60 percent of taxpayers now using paid preparers, the issue is significant.
Under a statute allowing the Treasury Department to regulate the work of representatives who come before it, the IRS has said it has the authority to implement its initiatives. "The IRS has always claimed, and the courts have always sustained, the right to govern who practices before it," said Sheldon Cohen, a former IRS commissioner. In an interview with The Wall Street Journal, Cohen said he thought the courts would be sympathetic with that argument.
But Dan Alban, an attorney at the Institute for Justice, says that the IRS is trying to take hold of an authority to license tax preparers that Congress hasn't given it. He stated that the regulations "broaden [IRS] power beyond anything the statute authorizes."
Patricia Thompson, chair of the AICPA Tax Executive Committee, told members of the House Ways and Means Oversight Subcommittee at a hearing on July 28 that "the American Institute of Certified Public Accountants (AICPA) supports the IRS program, as it is currently structured, to regulate tax return preparers. We believe the IRS should be commended for its efforts to implement the return preparer program." Thompson said. "They listened to stakeholder concerns and suggestions, and they've gotten it right."
Thompson told the subcommittee, "The AICPA supports the following elements of the IRS' regulatory program:
- Registering paid tax return preparers and issuing them unique preparer tax identification numbers.
- Expanding the ethical umbrella of IRS Circular 230 over all paid income tax preparers.
- Creating a continuing education construct geared toward 'unenrolled' preparers.
- Implementing a basic Form 1040 examination as a condition to become a 'registered tax return preparer.'"
However, AICPA Vice President of Taxation Ed Karl said that while he thought the IRS initiatives benefitted the government and the public, he could understand the resistance from certain preparers.
To learn more about the requirements the IRS has set forth, read the IRS Return Preparer Regulations Overview.
- Lawsuit Charges IRS with "Power Grab" in New Tax Preparer Regulations
- IRS Launches Competency Testing for Tax Return Preparers
You may like these other stories...
Boehner addresses GOP priorities ahead of midterm electionsHouse Speaker John Boehner (R-OH) on Thursday delivered what amounted to closing arguments ahead of the November elections, laying out a list of Republican...
As anyone who's ever been through a divorce can attest, the pain of parting with your spouse isn't just emotional—the fallout from divorce can wreak financial havoc as well long after the dust in the courtroom...
Former DOJ Tax Division head Kathryn Keneally joining DLA Piper in New YorkGlobal law firm DLA Piper announced on Thursday that Kathryn Keneally, the former head of the US Justice Department Tax Division, is joining the firm...
Upcoming CPE Webinars
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.
This webcast will include discussions of important issues in SSARS No. 19 and the current status of proposed changes by the Accounting and Review Services Committee in these statements.
Kristen Rampe will share how to speak and write more effectively by understanding your own and your audience's communication style.
Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.