IRS Announces New Regulations for Tax Preparers

Breaking Tax News- IRS Commissioner Doug Shulman announced that he is starting a new plan to help the IRS better leverage the Tax Professional community by the end of 2009. This is supposed to help increase compliance and ensure high standards of conduct for tax preparers.

This should include:

-Enforcement related to return preparers misconduct
-Education and training for tax preparers

“Tax return preparers help Americans with one of their biggest financial transactions each year. We must ensure that all preparers are ethical, provide good service and are qualified,” Shulman said. “At the end the day, tax preparers and the associated industry must be part of our overall game plan to strengthen the integrity of the tax system.”

The Good News: This is good news that could prevent hundreds of taxpayers from being ripped off by shady tax debt resolution companies or tax preparers.

The Bad News: It's a massive undertaking to take on all of the fakers. I don't think even the big bad IRS has what it takes to rein them all in. This means it's still your job to pick out the Good from the Bad.

A Quick Checklist: Here's a quick way to know if you're working with a good, ethical Tax Resolution Company.

1. No Retainer Fee- A "Retainer Fee" is a way for companies to charge you more fees later. Work with a company with a fair price that doesn't change.

2. Excellent Refund Policy- Simply ask them if they offer a Refund Policy. Attorneys work as they're paid, so you can't expect a full refund, but you should expect partial or close to it if the service performed didn't suit your expectations.

3. No Hidden Fees- A lot of companies will tell you one price on the phone and send you a higher price when they mail you the contract. Ask them if the price they tell you on the phone is the set price, make sure they don't have hidden fees.

4. No Pressure Agreement- Some companies have a "Locked In" policy. Once you sign the contract, you're locked in for good. Work with a company that allows you a grace period to change your mind.

5. The Truth: If a company tells you that you can settle your tax debt for "Pennies on the Dollar," they're not telling the truth! True, a tiny sliver of the population may qualify for a settlement, this does not represent the majority of taxpayers.

Final Tip: A lot of companies will say that filing for "Power of Attorney" makes you untouchable by the IRS. This isn't true! It may put your case in a more negotiable state, but the IRS can still take action against you if they must.