Wednesday, August 11, 2010

Congress Presses IRS to Ease Tax Preparer Regulations

Thirty-one members of the House of Representatives have reportedly signed a letter urging Treasury Secretary Geithner to ease up on tax preparer regulations. The members of Congress, including nine members of the tax-writing House Ways and Means Committee, are hoping to exempt non-signing tax preparers at CPA firms from registration requirements. They have also requested a delay in the IRS’ plans to launch a nationwide examination of tax preparers.

Web CPA reports:

    The group, led by Brad Sherman, D-Calif., and Michael Conaway, R- Texas, said the IRS should modify its proposal. “We believe that the IRS has neither demonstrated the need for extending the non-signing preparer requirements to CPA firms nor that its proposed testing program merits shifting IRS resources away from other mission-critical programs,” they wrote. “We believe that any testing program should be deferred until the IRS has performed an adequate study to determine the level of return preparation problems caused by a lack of preparer competence and whether testing would have a meaningful effect on reducing those problems.”

    The letter argues that requiring IRS registration of non-signing preparers who work for CPA firms is unnecessary because state boards of accountancy already regulate CPA firms and individual CPAs, and because the IRS would be able to monitor the quality of the CPA firms’ work through the preparer tax identification numbers of the CPAs who sign the tax returns.

    The PTIN numbers will be assigned by the IRS when the CPAs register and will have to be included on all the tax returns they sign. The IRS has already excluded CPAs from the proposal’s examination and continuing professional education requirements because they are regulated by the state accountancy boards and Treasury Circular 230, the rules governing practice before the IRS, so there is “strong justification for not expanding the PTIN requirement beyond signing preparers in CPA firms with no adverse effect to the public.”

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