Don't Mess With Taxes

That's one possibility that was discussed at a public hearing yesterday on the IRS proposal to develop regulations for tax preparers.

"The data seem to encourage some kind of testing regime to ensure competency," said Karen Hawkins, director of the IRS Office of Professional Responsibility, which oversees tax preparers.

The data Hawkins referred to is a Treasury Inspector General for Tax Administration report that found in a 2008 sampling of returns completed by paid preparers, 61 percent of those filings were prepared incorrectly.

Hawkins and other IRS officials at the hearing, including Commissioner Doug Shulman, also were curious about how state officials regulate tax preparers. While there is no national standard, several states, including New York, California, Oregon and Maryland, do regulate tax preparers.

State tax officials at the hearing encouraged the IRS to create a national, public registry of tax preparers.

The IRS has posted the written testimony of the Sept. 2 panel participants, as well as the recommendations from those attending a similar hearing in July and a complete transcript of that July 30 session.

Media coverage of the hearing is available from Dow Jones Newswire and Reuters.

And you can read more on the tax pro regulation issue here on the Don't Mess With Taxes in these earlier posts:

• More tax preparer oversight questions
• Tax preparer regulation debate heats up
• IRS gets ahead of itself on tax pro regs
• Tax pros, prepare for more IRS oversight

Until the IRS sets some official standards, and even after it does, you can make sure you select a qualified tax preparer by following the steps discussed in Picking a tax pro.