Leaders from four organizations recently discussed their reasons for supporting a proposed law that would reinstitute the IRS’s 2011 Registered Tax Return Preparer program.The Taxpayer Protection and Preparer Proficiency Act, H.R. 4184, introduced by Representatives Jimmy Panetta (D-CA) and Tom Rice (R-SC). The preparer program was thrown out by federal courts.
Representatives of the National Association of Enrolled Agents, The America Institute of CPAs, Padgett Business Services and H&R Block outlined their concerns about professional preparers' qualifications during a press briefing.
Because of the lack of standards and regulations, “Many preparers have become concerned about a race to the bottom for Enrolled Agents,” David Tolleth, EVP of the NAEA, said during the recent briefing. “Almost two thirds of tax returns preparers are unregulated, not required to meet basic competency standards”.
The proposed law would grant the Internal Revenue Service the right to revoke Preparer Tax Identification Numbers because of fraud or incompetence. It clarifies that individuals who prepare returns under the supervision of an attorney, CPA or enrolled agent are not required to obtain a PTIN. The act also would require a Government Accounting Office study on the sharing of information between the Treasury Department and State authorities regarding PTINs issued to paid return preparers and preparer minimum standards.
The problem of preparer competence has been aggravated by the impact of the COVID-19 outbreak, Tolleth said. “The pandemic has catalyzed a new wave of fraud and scam,” he said.
Additionally, IRS resources have been strained because of inadequate funding.