Keep This in Mind When Choosing a Tax Preparer

The IRS announced its voluntary certification program for tax preparers yesterday. The IRS, due to the increase in tax fraud by illegitimate tax preparers, has already made it compulsory for every tax preparer to have a unique Personal Tax Identification Number (PTIN). This has helped taxpayers stay protected from many unscrupulous tax preparers. All they need to do is to check the PTIN of the tax preparer.

As most tax preparers are unregulated, it can be difficult for taxpayers to find competent tax preparers and to understand their qualifications. With the new certification program, the IRS aims to help taxpayers to know at least the minimum competency level of a tax preparer before they hire their services.

"It helps lessen the risk to taxpayers from preparers who have no education in federal tax law or filing requirements,” IRS Commission John Koskinen said. "And it allows preparers without professional credentials to stand out from the competition by giving them a recognizable record of completion that they can show to their clients."

Along with the voluntary certification program, the IRS is also looking to get the authority to create new rules for training and testing of tax preparers. However, any expansion of IRS authority needs to be approved by Congress and is unlikely due to the recent IRS scandals.  

Starting next year, tax preparers who sign up for the voluntary certification program will need to complete 18 hours of training in a year and also pass a test to show their competency in understanding tax filing processes, etc. As attorneys, certified public accountants (CPAs) and enrolled agents already must meet continuing education requirements to maintain their credentials, they will not be required to undergo the additional training.

Questions are already being raised about the quality of the tests and their effectiveness, especially by the National Taxpayer Advocate, an independent office under the IRS.

Labels: , , ,