I was recently asked how I felt about the new standards for tax preparers. My response was “It’s about time!”. It never ceases to amaze me that someone would actually pay to have their tax return prepared by someone who is not a licensed CPA. As a CPA I had to pass an exam, I am required to take 40 hours of continuing education every year and if I do something wrong I can have the license I worked so hard to obtain taken away from me. The CPA exam was one of the hardest exams I have ever taken and I have no intention of having my license taken away nor do I want to go jail. So I work very hard to keep my clients in compliance. And I find it very frustrating to compete with paid preparers who will work for less because they do not have the same overhead that I do in order to keep up a license.
The new rules will require that all tax preparers will have to register with the IRS and have a Preparer Tax Identification Number (PTIN). Really? Does this mean that currently the IRS has no idea who is preparing some of the tax returns reported to them and therefore cannot go after them when they do something wrong? CPAs are registered with their state and with the IRS.
Paid tax return preparers will have to take a competency test. Really? One should actually have knowledge of the tax code in order to prepare tax returns? This seems like it should be common sense and the general public should be demanding it. CPAs have to pass one of the most strenuous exams in order to get their license.
Paid preparers will be required to complete 15 hours of continuing education annually. Really? One should be required to stay current on the tax law changes? CPAs have to take 40 hours of continuing education each year in order to keep their license.
All tax return preparers will be subject to ethical standards. Really? Those preparing tax returns should have ethics? CPAs are currently subject to ethical standards.
Some say that this will just cause the unscrupulous tax preparers to go underground and prepare returns but not fill in the paid tax preparer section. They could be right. I would hope that the public would wonder why their tax preparer refuses to fill this section out. After all it is right by where everyone signs their tax return it is not like it is hidden and easily overlooked. Better yet I am hoping that the public will come to value CPAs and actually seek out a CPAs advice when it comes to preparing their tax return.