IRS Getting Push-back on Return Preparer Regs

Most people are pleased with the IRS’ new tax return preparer regulations and are hopeful that they will help to purge the system of incompetent preparers.  But Elmer Kilian, an 80-year-old tax preparer from Eagle, WI, doesn’t want the government meddling in his business.  He and two other return preparers are filing a lawsuit seeking an injunction that bars the regulation from taking effect.  The lawsuit is being filed by the Institute of Justice in Arlington, Virginia.

The return preparer regulations include registration, testing, and continuing education elements — each element, of course, includes some costs that must be born by the preparer.  However, most of what I’m seeing in opposition to these regs has less to do with the costs than it does with pride and independence.  Some people just don’t want the IRS influencing their private businesses choices; they don’t like what they think is excessive government regulation.  Some folks have been preparing returns the old-fashioned way (maybe even with a quill pen) for decades without any egregious errors, and they would rather close up shop than change their ways.

Kilian and others also like to gripe about the injustice of exempting the CPA and tax attorney from testing and continuing education requirements.  I don’t know about CPAs but, trust me, if attorneys were subject to any more regulation they wouldn’t be able to get dressed in the morning without some regulatory authority telling them which tie they have to wear.

IRS Offers Advice on Interacting with Tax Preparers

You can often avoid tax problems early on if you select a competent tax preparer. This post is based on “IRS Tax Tip 2012-06″ published by the IRS earlier today.

The title given by the IRS was “Ten Tips to Help You Choose a Tax Preparer,” but I think you will agree that this is not an accurate title. I think the author started off listing tax preparer selection tips, then ran out of suggestions by #8 or so, but really wanted to have a nice round 10 items on the list. Not that numbers 8-10 are bad suggestions, they just don’t exactly qualify as things you can do to help you choose a tax preparer. Numbers 8 and 9 will probably come into play only after a bad tax preparer has been hired. And number 10 has nothing to do with selecting a tax preparer other than the fact that you most likely would not select an abusive tax preparer two years in a row.

Here’s the list in abbreviated form:

  1. Check the tax preparer’s qualifications: PTIN, certifications, professional organizations, etc.
  2. Check the tax preparer’s history: get on the internet and poke around a little
  3. Find out as much information as you can about their fees
  4. Make sure they will file electronically
  5. Make sure the tax preparer is accessible
  6. Make sure the tax preparer asks you enough questions and asks for enough information/documentation to be able to legitimately prepare your return
  7. Never sign a blank return
  8. Review the return before you sign it (you are ultimately responsible for what is on the return, even if you get a professional to prepare it)
  9. Make sure the tax preparer signs the return and includes his/her PTIN
  10. Report abusive tax preparers to the IRS