Tax Preparers to Be Regulated By IRS

January 17, 2010 by Debbie Dragon

in full swing, and many people will choose to have their taxes completed by a paid tax preparer, seeking the largest refund possible. Most of these tax preparers are unregulated, but that may soon change, according to the Internal Revenue Service.

It is unclear as to how many tax preparers are in existence, but the IRS estimates that there are over 1 million in operation. These tax preparers will soon be required to take a test every year, and will have to register with the government. These rules will apply to both national Tax firms as well as independent tax preparers. However, the regulations won’t take effect this tax season.

The requirements are being put in place in an effort to reduce fraud and mistakes, and will hopefully improve service from preparers. Credentials of preparers will be available for taxpayers to peruse on an IRS database.

The IRS plans on sending notices to thousands of preparers, especially those who have been prone to errors in the past. The IRS also plans to send agents to locations of thousands of tax preparers. Some preparers will be notified in advanced, while others will not. Agents will often disguise themselves as ordinary taxpayers to gauge the level of service that they receive. If the level of service is not satisfactory, the tax preparer may be subject to penalties.

Most people choose to have their taxes done by a paid tax preparer. However, most tax preparers are not subject to any regulations. Lawyers, certified public accountants, or enrolled agents will be exempt from any new tests or classes, as they already meet the requirements through their fields.

While some preparers may loathe the idea of rules and regulations set forth by the government, others are already embracing it. H&R Block has issued a statement stating that they are confident that their training practices already exceed the expectations of the IRS.


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