Paying taxes is one of the most important tasks Americans face every year. Many entrust tax preparers with their most intimate financial details, and ask them to represent them before the government. But who keeps the preparers preparedâand responsible?
That's the job of the new Office of Professional Responsibility, launched early this year by the Internal Revenue Service. The expanded group, which replaces the Office of Director of Practice, sets and enforces standards for responsible and ethical practice. Duties of the office were the topic of Tuesday's September edition of the Tax Talk TodayÂ® Internet broadcast.
"With improved resources and staffing, this new office is working to more aggressively deal with problem practitioners," said panelist Steve Whitlock, deputy director of the office. "We're going to make sure issues regarding professional responsibility are on the table." The group is expanding enforcement of the standards of practice for enrolled agents, attorneys, CPAs and actuaries.
Already, the office has decided to reorganize its process for renewing licenses, making the computer-based test more comprehensive, and giving it more frequently. Whitlock said the plan is to test one-third of agents each year, eventually through the use of private-sector test centers. "The IRS is a world-class tax administration, but not a world- class test center," he admitted.
In a survey of Tuesday's viewers, 85 percent of the tax professionals polled agreed that people who represent taxpayers should be licensed.
Tax professionals welcome guidance from the new office, particularly with issues such as non-compliant clients, said Frank Degen, enrolled agent. "For instance, the office reminds us that when clients refuse to correct errors in their tax returns, it's our obligation to alert them of the errors and their consequences."
Bill Parrish, founder of TaxAdvantage, said true professionals appreciate the assistance of the IRS. "Failure to keep personal tax practices in order is one of the most frequent causes of agents losing their right to practice in front of the IRS," he said.
Whitlock said the role of his office is to lay out standards of professionalismânot to provide boundaries so people can see "how close to the edge they can get." He said the IRS typically receives 450-500 complaints a year about tax professionals.
Tax Talk TodayÂ® is co-sponsored by the IRS. Both the September program, entitled "Professional Responsibility for Tax Professionals," and previous Tax Talk TodayÂ® broadcasts are available in the archives at http://www.TaxTalkToday.TV