Don't Mess With Taxes

Some tax professionals and judges on two federal courts might not think much of tax preparer regulation, but most Americans support the concept.

That's the word from the 2013 Taxpayer Attitude Survey. The querying of Jane and John Q. Public's thoughts about the Internal Revenue Service in particular and tax matters in general is an annual undertaking of the IRS Oversight Board, a presidentially appointed independent panel created to offer guidance to the IRS.

A whopping 96 percent told the IRSOB that it's important that tax preparers meet basic competency standards. That percentage is this week's By the Numbers figure.

That nearly-unanimous figure includes the 80 percent who said that such qualification is very important.

Resistance to IRS regulation: The IRS had proposed regulation of certain tax preparers to ensure that they met a minimum level of competency.

That ability to file federal taxes would be measured by mandatory continuing education courses and tax tests. CPAs, Enrolled Agents and tax attorneys would be exempt from the IRS-planned oversight program since they already must meet professional standards for their professions.

Three tax preparers filed suit (Loving vs. IRS) to stop the IRS plan. A series of court rulings, the latest issued by the U.S. Court of Appeals for the D.C. Circuit on Feb. 11, sided with the tax pros.

IRS oversight effort effectively over: Now the IRS is mulling its next move here.

Not to toot my own horn, but ta-dah!, it looks like the thoughts of new IRS Commissioner John Koskinen are basically right along the lines of my analysis of the tax agency's options following the latest court ruling.

Koskinen told Accounting Today that further legal action is essentially a no-go since there isn't any disagreement between different circuit courts on which to base an appeal.

The new commish also echoed my view that while some in Congress support giving IRS statutory authority to regulate tax preparers, current Capitol Hill politics make advancing any such bill difficult.

"We've had some indications of support in the Congress," Koskinen told the accounting publication, "although I recognize that in today'' political climate, getting legislation to give the IRS authority to do anything is probably a bit of a stretch."

Voluntary oversight only: So Koskinen and I both are betting on a voluntary tax preparer certification system.

Koskinen has noted several times such a program would be welcome by tax professionals who already participate in continuing education efforts.

An official, albeit voluntary, method under which tax preparers would be credentialed would offer participating pros an added marketing tool.

Based on the IRSOB 2013 survey results, most taxpayers would welcome such IRS-ordained tax preparers.

You also might find these items of interest:

• Time to pick the proper, and properly prepared, tax pro
• New York joins small groups of states that regulate tax preparers
• More tax professionals (including bloggers) formally support legal challenge
  of IRS' effort to regulate tax preparers