Page One of any Regulation is $$$

[Snaggletooth]

Don Priebe posted on the "Oregon Twist" thread:

New York will be licensing tax preparers starting in January 2010. The basic concepts were included in the budget this year, but the details and procedures have yet to be issued by the Dept of Taxation. Initial requirements to be a licensed tax preparer ... pay a fee of $100 per year.

In other words, they don't know what they want to do, but whatever it is, the first item of business is to stick preparers with this $100 fee. This by itself is perhaps not monetarily objectionable, but they've got their foot in the door with yet another revenue source that can be increased whenever they want. Notice the Dept of Taxation is driving the train, with no help from the NY chapter of NAEA, or any other representation from our industry.

Guys and gals, think twice about whether we really want this. We have been unable to police ourselves, so is this what we can look forward to?

Don't read further unless you want to hear about a typical govt regulation train wreck.

I'm old enough to remember the "entrance permits" established by Tennessee. State highways (which comprise almost ALL major thoroughfares) were becoming bogged down with so many highway entrances from commercial businesses that traffic hazards were developing, with increases in fender-benders, injuries, etc.

Some brilliant bleeding-heart came up with the idea of having these businesses apply for a highway entrance before being able to just create one. This would require some expert to carefully review the application, gather statistical information on traffic patterns, etc. and then grant (or not) the permit on the merits of the situation.

Are you nuts??? The state eagerly passed the requirements, and attached a $1000 application fee for these businesses to "cover the costs associated with the permit."

Result: All you will ever have from the State is a cashed check for $1000. No "careful review." No "expert". No "traffic pattern study." And no relief to the regurgitation of cars pouring onto state highways from parking lots such as other states have been able to accomplish.

Wanna highway permit in downtown Nashville at the corner of US70 and US41? (TN hwys #1 and #2) No sweat, just send them $1000! Doesn't matter that two dozen entrance permits are already there...

[erchess]

Another Point Of View

I think most of those regulated are happy with the combination of self regulation and IRS Regulation that applies to EAs, CPAs and Tax Attorneys. We won't ever reach a situation where all tax practitioners are competent and ethical. I would argue, however, that the incompetent and unethical individuals who are hardest to deal with are the unregulated because they don't have a professional organization or the government looking over their shoulder. On the other hand there clearly is a place in this industry for people who are not EAs, CPAs, or Tax Attorneys. I therefore propose the following.

There should be stiff penalties for anyone who prepares a return for money without signing as paid preparer or who signs without having earned the right to do so.

Nothing in the new regulations should be interpreted so as to prevent a person who legally signs as paid preparer from hiring assistants at his or her sole discretion to do some or all of the work provided only that the signing preparer shall be as responsible as if he or she had done all the work personally. (Reliance on another paid preparer or a reference such as TTB is a topic for another thread.)

To sign as paid preparer the sole requirement should be membership in an existing or yet to be created Professional Organization. While a person may of course change organizations voluntarily and may belong to as many as will take him or her, any organization to which one belongs should have the power to unilaterally suspend or permanently revoke the member's right to be a paid preparer pursuant to its own policies and procedures with oversight of course from the Courts and the Taxing Agencies.

While the rules regarding representation remain as they are, everyone who signs as paid preparer needs to be regulated in the same manner by the taxing agencies. Thus if one of us loses business to "the guy down the street who says....." at least we can take solace that he risks the same things we would be risking if we did as he does. IOW the consequences for a particular action under particular facts and circumstances do not bend because of what sort of preparer one is.