Monitoring of Tax Preparers Won't be Fully Implemented until 2014-Taxpayers Beware!

This is the first year that the IRS has asked tax preparers to register with the IRS.  It is a great first step in monitoring the almost 1 million tax preparers in this country.  However, now a report has come out saying that the IRS just doesn't have the resources or systems to collect the information for another three years.

The IRS's initiative would require competency testing and 15 hours annually of tax education for all tax preparers.   CPA's are already required to take 40 continuing education hours annually by their state boards of accountancy.  Most of my annual hours are tax related as the tax laws change almost continually.   I am amazed at the work I see on client's past returns done by some "tax preparers" that do not have adequate knowledge of the tax laws. 

According to the IRS report,  it is going to be another three years before these types of tax preparers are weeded out of the system by adequate testing of their abilities. 

Buyer beware.  I suggest that if you are looking for a tax preparer that you either use a CPA or an enrolled agent. They both have have competency tests and continuing-education requirements.  CPAs are governed by state boards of accountancy and EAs by the IRS.  Also it is fairly easy to find out whether a CPA or EA has been censured. That is not the case for paid preparers who don’t have a designation.

Currently almost anyone can start calling themselves a tax preparer and start preparing returns.  This needs to be changed and hopefully taxpayers won't have to wait until 2014.