The American Institute of CPAs is objecting to a bill that was introduced in the House giving the Internal Revenue Service the statutory authority to regulate tax return preparers.
“Congress should not enact yet another set of rules for professional, credentialed tax return preparers,” the AICPA said a letter last week to the chair and ranking member of the House Ways and Means Committee opposing the Tax Return Preparer Competency Act of 2015, H.R. 4141 (see Congress Introduces New Bill to Regulate Tax Preparers).
Writing to House Ways and Means chairman Kevin Brady, R-Texas, and ranking Democratic member Sander Levin, D-Mich., AICPA Tax Executive Committee chair Troy Lewis explained, “Ensuring that tax preparers are competent and ethical is critical to maintaining taxpayer confidence in our tax system. Indeed, these goals are consistent with AICPA’s own Code of Conduct and enforceable tax ethical standards. However, we believe the Tax Return Preparer Competency Act allows the IRS to overregulate professional, credentialed tax return preparers and their staff without providing adequate value to taxpayers or additional protection to the public.”
Rather than enact yet another set of rules for professional, credentialed tax return preparers, the AICPA recommends Congress mandate that the IRS enact a testing and continuing education program similar to the registered tax return preparer program in effect prior to Loving [v. IRS] that would apply exclusively to so-called ‘unenrolled’ tax return preparers who are not licensed by the states.”
After federal courts invalidated the RTRP program in 2013, finding the IRS had exceeded its statutory authority in requiring mandatory testing and continuing education of preparers who are not already regulated as CPAs, Enrolled Agents and attorneys, the IRS introduced a voluntary education and testing program known as the Annual Filing Season Program. However, the AICPA has sued the IRS to stop the voluntary program.
“Certified public accountants and attorneys are highly-regulated and licensed at the state level,” Lewis explained. “They are subject to rigorous education, testing and continuing education requirements as opposed to the ‘fly-by-the-night tax preparers’ that the Tax Return Preparer Competency Act intends to address.”
The AICPA believes the IRS should also more effectively utilize their current preparer tax identification number, or PTIN, system to protect the public from incompetent and fraudulent tax return preparers. Further, any legislation should also address the IRS’s burdensome requirement that non-signers of tax returns obtain PTINs, particularly because the IRS has no ability to track or use PTINs for individuals who do not sign returns.
Lewis added that the AICPA looks forward to working with the committee and the sponsor of the legislation “in order to address our concerns and improve the bill to achieve our shared goal of enhanced tax return compliance and elevation of ethical conduct of tax return preparers.”
The AICPA has expressed similar reservations about a bill that was introduced in the Senate in Janaury to regulate tax preparers by Sen. Ron Wyden, D-Ore., and Ben Cardin, D-Md.