Something .............

[BOB W]

..........interesting ...........

NEWS
April 12, 2006

Congress Urged To Regulate Paid Tax Return Preparer Industry By Enacting S832
On April 4, 2006, speakers at a Senate Finance Committee hearing called on Congress to regulate the paid tax return preparation industry in an attempt to improve the tax advice it offers while working to prevent unscrupulous behavior. The accuracy of paid preparers’ work was highlighted by a General Accountability Office (GAO) report, which indicated paid tax preparers completed virtually no returns correctly for GAO investigators posing as taxpayers.

GAO told the Finance Committee that it found serious problems in the work of paid return preparers at major chains. “Taxpayers relying on paid preparers to provide them with accurate, complete, and fully compliant tax returns may not get what they pay for,” said Michael Brostek, GAO director of strategic issues. In visits to 19 outlets of major tax preparation chains, nearly all of the return prepared with incorrect to some degree. Many of the problems identified per preparers, taxpayers or both at risk of IRS Enforcement actions.

The Chairman of the Finance Committee, Senator Grassley (R-IA) said that GAO report would create new momentum to consider the Taxpayer Protection and Assistance Act of 2005 (S.832) which is currently pending in the Senate. That bill would give the IRS Office of Professionals Responsibility authority to regulate all paid income tax preparers, require advisors who prepare federal income tax returns to undergo examination and maintain continuing education requirements, and impose non-monetary sanctions, such as termination or suspensions, for failure to comply.

[Bees Knees]

So in other words, because the paid preparers failed to come up with the answer the GAO people thought should have been the correct answer, we all have to be regulated.

What if the paid preparers calculated the correct tax and the GAO people got the tax wrong?

I’ll bet I could come up with a tax test no IRS or GAO employee could pass. Does that mean we would then get to regulate them?

[Bees Knees]

Are they also going to require the same standards for IRS employees?

Take this article, for example:

http://moneycentral.msn.com/content/Taxes/Preparationtips/P105690.asp

“The IRS has over 400 offices nationwide where you can walk in and get help. They're called Taxpayer Assistance Centers, and you can find the one closest to you by calling (800) 829-1040. Here again, you're dealing with people who are supposed to know the law… In a 2005 test of the system by the Treasury Inspector General, 35% of answers were incorrect.”

So using the same logic GAO is using to call on Congress to regulated the paid preparer community, they also ought to require IRS employees to pass strict professional licensing standards.

But of course, that would drive up the cost of hiring IRS employees. So we can’t do that.

But then, wouldn’t that also drive up the cost of hiring a paid preparer?

[Bird Legs]

Paid Preparer errors

So the GAO told the Finance Committee that it found serious problems in the tax returns
prepared at MAJOR CHAINS.
Why did they take these returns just to major chains? Maybe these are the ones that
should be regulated.
Just kidding. This would affect all of us.
As Bees says, how are the GAO people qualified to know whether the tax returns were
done properly or not?

[Gretel]

Yes, it's rather interesting. Would be good to know some details about the "errors". Maybe they were simple obvious things.

I support the idea to have some credentials or, more important, the requirement for CPE for all people involved in tax prep. Paid preparers, unpaid preparers, IRS. It's good for people to have free tax return service available but only if it is quality service.

Why not stay out of the preparation business if you can't do a good job and leave the work with us professionals. If we could just concentrate on what we are trained to do we could offer some pro bono work and the taxpayers would be better of.

[jainen]

a terrible study

>>Would be good to know some details about the "errors". <<

This was a terrible study, unfortunately typical of the garbage data generated by government agencies. GAO made no effort to understand what is really going on. They only conducted 19 interviews, all in similar storefronts in a single city. They did not talk to accountancy firms or single professionals. They had no control group and did not bother to describe how they determined what was an error.

In some cases the study's flawed methodology contributed to the errors. In one example which they say had serious problems, the worker did not even function as a paid preparer. In another with serious problems, the investigator failed to provide requested documentation of income and expenses (because, of course, the income and expenses that were not reported never existed in the first place.)

In classic bureaucratic inaction, GAO did NOT conclude that there was a need to regulate anything. Their experiences "do not permit observations about the quality of work of paid tax preparers in general." The GAO simply asked the IRS to do its own study.

The report is published at http://www.gao.gov/new.items/d06563t.pdf

[OldJack]

first kill all the lawyers

There would be zero errors if the government would abolish the individual income tax. The time has come to undo this tax nightmare requiring self-determined taxation from tax laws that are not understandable by the public or even professional tax preparers. Shoot all the lawyers that have created this mess.

[Armando Beaujolais]

Add to the irony (hypocrisy?) the efforts by the IRS to convince taxpayers they can do their tax returns themselves.

How do we know the returns weren't prepared correctly? The IRS can't give accurate advice to taxpayers, the legislators who write tax law don't understand what they're doing, why should we believe that GAO folks went in with the right answers to begin with?

[jainen]

We KNOW

>>why should we believe that GAO folks went in with the right answers to begin with<<

We KNOW the GAO didn't ask the right questions. All they found out was that if you want to do a fake tax return, a franchise shop might not be the best choice.

[John of PA]

Did you know.................

Speaking of regulating us; all the hype about allowing tax preparers to sell thier database info to telemarketers was a back door approach to regulate the profession under telemarking regs. I forget where I read this but it makes sense.