TaxMama’s ® favorite pastime happens to be answering tax questions in my TaxQuips Forum. Over time I've noticed a great many of the questions show one of the following three things. And this indicates some serious problems with the education and supervision of tax preparers in the United States.
- A complete lack of awareness of the tax reference tools available to tax professionals and the public.
- A total laziness in looking things up for themselves.
- Just a flat-out lack of familiarity with the laws and updates.
All of these are frightening thoughts.
Let’s start with the last issue first: not keeping up with changes. While all tax, accounting, and legal professions require annual continuing education (CE), not all licenses require any updates in taxation at all. So, not everyone bothers to take tax update courses. Or folks blow through some four-hour online self-study thing in a half hour, without really learning the updates. But they do pass the mini exams the courses provide.
Frankly, I miss the old days when the tax software company (generally an out-of-house processing company like CCH Computax, Unitax, Dynatax, etc.) would hold its annual workshops. Not only would you sit there for eight hours learning how to input data into their forms, you would also learn the relevant updates to the tax laws. Often, the sessions were free – and provided CE credits – so firms would send all their tax staff.
Today, we buy the tax software and use it in-house. The developers are providing video mini courses showing how to use various parts of their software. But few companies are still providing in-person workshops.
Moving on to issue number two: no clue where to start looking. This is because there is no minimum standard for licensing a tax professional in 47 out of 50 states. (California, Oregon, and Maryland are exceptions. Although New York expects you to register – they have virtually no standards). So, in 47 states, you don’t need a high-school education; to speak English; to know where the tax laws are located; to know how to read or write…or anything. Anyone can open up a tax preparation office and get paid to do tax returns – and they do. These are your competitors. (True, there are many well-trained and educated folks in those states, as well. You will find that they have joined NAEA, NATP, and other accounting and tax societies to stay up-to-date.)
Sadly, some of the questions that come to me are frighteningly ignorant of even the most fundamental rules about the correct way to identify dependents, those who qualify for earned income credits and other tax benefits, and laws that you and I know and deal with every day.
Thanks to the wisdom of some people who felt getting CE was an excessive burden (Loving v. Commissioner), the platform that the IRS finally put into place to regulate tax preparers collapsed. (It took 100 years after the first post-Civil War tax return was created in 1913 to develop the guidelines.)
So, we still have in our midst a substantial body of totally ignorant, often fly-by-night operators who have never read Publication 17.
And that brings us to the first issue: lack of awareness of the tools. If nothing else, everyone in the tax prep profession needs to read Publication 17. (Note: It’s much easier to read than the Prentice Hall or CCH Tax Course provided in college. I don’t fall asleep nearly as often reading Publication 17 compared with the tax course volumes.) It contains all the fundamental information related to preparing a personal tax return. It even has examples, worksheets, and tax tables.
Of course, it is nice to actually go to the source – the Internal Revenue Code is online. For free. Really. The most recently updated version is the one at Cornell University. Remember to donate some money to them once in a while to help keep the resource current.
There are a bunch of other common research tools that I use all the time – along with some worksheets and other resources. You can find them in TaxMama’s® free resources. And really, when you need to find an answer to just about anything – try Googling the topic. You’d be amazed how much good, relevant information you can find, including in-depth articles, court cases, and more.
Naturally, there are excellent paid tools – and you’ll find them advertised all over this website. But, don’t forget to check with your tax software providers. They include a whole host of tools for you to use. When was the last time you tapped into their databases and resources?
And please – before asking about routine things – do learn to look them up yourself. You’ll be ever more powerful.
About the author:
Eva Rosenberg, EA, is the publisher of TaxMama.com ®, where your tax questions are answered. Eva is the author of several books and ebooks, including "Small Business Taxes Made Easy." Eva teaches a tax pro course at IRSExams.com and tax courses to help you deal with tax debt http://www.cpelink.com/teamtaxmama.