A federal system that would require tax preparers to be licensed would ferret out the “incompetents and other cheats” who give the profession a black eye, say industry experts affected by the proposal.
The idea to license and certify tax preparers was proposed Thursday by Doug Shulman, Internal Revenue Service commissioner, who said the incentive is to improve tax compliance and reduce fraud.
“We must ensure that all preparers are ethical, provide good service and are qualified,” Shulman said. “At the end the day, tax preparers and the associated industry must be part of our overall game plan to strengthen the integrity of the tax system.”
Between 2006 and 2008, the IRS says, it initiated more than 600 investigations of fraud among tax preparers. But, Shulman said, when the IRS detects a fraudulent return, the taxpayer — not the preparer — pays the penalties.
Currently, tax preparers are not licensed at the federal or state level, and anyone can open a business to file tax returns.
“I believe it’s a great idea and we’ll get rid of the fraud, the incompetents and other cheats,” said Robert Beecher, a Denver-based tax professional who is president of the Colorado chapter of the National Association of Tax Professionals.
Shulman said he wants better leverage to make sure tax preparers act ethically, not only to improve enforcement but to ensure that taxpayers get quality help in preparing their returns.
Consumers would ultimately benefit, Beecher said, because there would be less guesswork in choosing a preparer.
“There’s more opportunity to pick someone who would do it right, less fraud,” Beecher said.
“So many people right now have their returns prepared by someone who’s either lying or incompetent, and they wind up in trouble.”
Although the IRS can conduct criminal investigations and even censure a tax preparer, there is no method of ensuring credentials.
The U.S. Treasury Department offers certification as an enrolled agent for preparers, requiring ongoing education and training, said Beecher, himself a certified preparer.
David Migoya: 303-954-1506 or dmigoya@denverpost.com
