IRS may seek licenses for tax preparers

[DTS]

wouldn't the best solution to this whole problem be "to simplify the whole tax filing rules and regulations"
How much money did you earn? send it in. lol

We're getting there, taxmom. Can't you be patient for a year or so?

[kaimana]

I intend to write to the NATP govt guy who is involved with this issue.

My idea is for the IRS to match TPIN numbers against their list of EA's CPA's and other licensed professionals.

there are many states that don't require licensing and the cheaters are prolific. I am all for weeding out the bad preparers because they not only hurt our profession but they seriously damage their clients who they propose to be helping.

[joanmcq]

I am for something to not just wean out the cheaters but to make sure the preparer has at least a minimum of education to prepare returns and to require continuing education. The CA test and requirements arent' that stringent; the Oregon ones require you to get experience before you can hang out your own shingle as well. I'd like to see stats on bad preparers in OR vs CA vs the rest of the country.

[taxxcpa]

Simplification

wouldn't the best solution to this whole problem be "to simplify the whole tax filing rules and regulations"
How much money did you earn? send it in. lol

Another alternative: have a national sales tax and give everyone an equal refund so the lowest-income people get back all they pay while the fat cats only get a small percent of the millions they pay.

It wouldn't be as "fair" as a graduated income tax, but if a fair tax costs you $ 10000 and an unfair tax only costs you $ 5000, which is fairer?

[PIGLEE]

I don't like a National Sales Tax. In Arizona the Sales tax is NOT SIMPLE. They have exemptions, special rates, exclusions, it goes on and on and on and on .......... Then there are State taxes, County Taxes, and City taxes. I am afraid that a National Sales tax will be even more complicated. Sounds simple but it won't be.

[erchess]

Naational Sales Tax

I could live with a national sales tax as long as we were careful to limit the things a person could do with a dollar that would not subject it to the sales tax. Obviously if they donate it to a charity or stick it in a hole in the ground it is not taxed. There might be a net savings to society if money invested in Government Bonds was not subject to tax. And I like the idea of an annual check for every adult equal to the tax on a low income household. But the thing that bothers me about a national sales tax is that wealthy people would not pay tax on money they saved.

[DTS]

I could live with a national sales tax as long as we were careful to limit the things a person could do with a dollar that would not subject it to the sales tax. Obviously if they donate it to a charity or stick it in a hole in the ground it is not taxed. There might be a net savings to society if money invested in Government Bonds was not subject to tax. And I like the idea of an annual check for every adult equal to the tax on a low income household. But the thing that bothers me about a national sales tax is that wealthy people would not pay tax on money they saved.

Just out of curiousity, would you like the NST in addition to income tax or stand-alone? After that, who would be the NST czar?

What's that old saying, "too many czars, so little time"?

[Black Bart]

Well...ahem,

at the risk of stating the obvious (and please excuse my self-serving view), wouldn't a national sales tax...umm...put most of us out of a job?

There's such a thing as being so open-minded that your brains fall out.

[GRich0656]

It seems to me, that so long as congress uses the tax code to attmept to control people's behavior, reward special interest in order to get reelected, and everything else under the sun, the income tax is here to stay for a long time .... with or without a sales tax.

[erchess]

Nst

I was thinking of the NST as a substitute for the Income Tax. The goal would be tax simplification. I also have not given much thought to the taxation of businesses but if their purchases were exempt from NST I could go along with not changing their income taxation.

I am not sure that BB is right that an NST would hurt us tax professionals. First of all, those of us who do accounting would have that to fall back on. Second, the States would still need revenue. I think there are a couple of States whose returns can be prepared even if the 1040 has not been prepared. But I believe most States are at least sometimes affected by decisions made on the Federal 1040 and with no such animal these States would have to make some new rules. Of course any given State might emulate the Federal approach but I don't think many would.

Anyway I don't think there is much chance that an NST will be enacted any time soon. In the recent Presidential Election the campaigns of the people who were putting these sorts of ideas forward did not catch fire and they were all in one party anyway and the nominee of that party lost convincingly.

[kaimana]

Black Bart...I doubt we would be out of a job. There would probably be a form that needs to be filed to pay the tax and there are so many people out there that either don't have the time or just don't want to do it themselves.

[taxxcpa]

No tax on savings

I could live with a national sales tax as long as we were careful to limit the things a person could do with a dollar that would not subject it to the sales tax. Obviously if they donate it to a charity or stick it in a hole in the ground it is not taxed. There might be a net savings to society if money invested in Government Bonds was not subject to tax. And I like the idea of an annual check for every adult equal to the tax on a low income household. But the thing that bothers me about a national sales tax is that wealthy people would not pay tax on money they saved.

You do have a point: if you make a million and only spend half a million, you would not pay tax on the savings. However, you would invest the money some way instead of storing it in a mattress, so it would stimulate the economy. Invested capital creates jobs, enables industrial production, etc.

The purpose of a tax should not be to punish people for making too much money. It should be designed to enable to government to function, so a tax that eliminated 90% of the IRS and a lot of other non-productive expenses might be more effective and cost the lower income people less than the current system even if Bill Gates paid less tax.

[DTS]

...But the thing that bothers me about a national sales tax is that wealthy people would not pay tax on money they saved.

I guess I'm very confused now. Would you be in favor of a straight NST for all, with no income tax levied on anyone, but then you say that there needs to be an inquiry on the amount of savings, but only for the weathly (weath would need to be defined by a few) and that that savings needs to be taxed, but only if you are wealthy?

Maybe, my read of your post is way off. Pardon me if it is.

D

[PIGLEE]

Please see my post under "unauthorized efilers?" I think it really belongs here.

[Black Bart]

You may be right, but

I was thinking of the NST as a substitute for the Income Tax...I am not sure that BB is right that an NST would hurt us tax professionals. First of all, those of us who do accounting would have that to fall back on. Second, the States would still need revenue...

I'd be very surprised if there were many people on this board who would not suffer a drastic drop in revenue if income taxes were replaced by a sales tax. I do some payroll taxes, some sales taxes, some accounting, etc. but it's definitely nowhere near the income generated from income tax. I'd bet many practitioners would lose 75% of their business.

Black Bart...I doubt we would be out of a job. There would probably be a form that needs to be filed to pay the tax and there are so many people out there that either don't have the time or just don't want to do it themselves.

I agree there'd be a form to fill out, but I can't see it would be even close to the volume of income tax forms. Our state sales tax is on a fairly easy two-page form and I've lost several clients to that plus the fact that many computer-literate younger people now simply file online themselves. While some don't want to DIY and/or don't have the time, many want to save that fee. Too, once they've filled in a form and it goes through okay, then next month's calculations are usually the same and they don't need us anymore. I assume the same thing would happen with a national sales tax.

It would be interesting to know what the average board member's percentage is for income tax work as opposed to write-up work.