Related Item

Visit the NSA - Forest T. Jones Blog, 
Play it Safe for advice to protect your family, career, and property. 

    Sample articles:
  • Is your firm's website a legal liability?
  • Who's the client? Answer can be complex
  • Responding to third party subpoenas



Tax Preparer Legislation: NSA Meets with Lawmakers

From the NSAlert: December 20, 2013

National Society of Accountants 
As we reported in September, individuals who attended the appeals court hearing in the Loving case were virtually unanimous in their opinion that the IRS was poorly represented at the hearing and expect the IRS to lose the case. Result: no authority to regulate preparers other than CPAs, attorneys, or EAs.

The tax writers on Capitol Hill have taken notice and believe the IRS should have the authority to regulate the unregulated—let’s call them RTRPs—and have begun meeting with interested parties to craft a legislative solution. That solution is not necessarily the status quo before Loving, so NSA was invited to weigh in on a legislative solution with the understanding that the solution envisioned on Capitol Hill would involve a test and mandatory CPE.

NSA pointed out that the regulatory scheme, crafted by the IRS, exempted from testing individuals who had taken and passed an examination recognized for regulatory purposes by a state, i.e., certified public accountants and attorneys, because passage of the state approved examination was assumed to demonstrate, at the very least, minimum tax competency. However, the IRS did not exempt from this new testing requirement other individuals who had taken and passed a state-recognized examination that demonstrated competency in tax matters. For example, the IRS required individuals who had passed either the tax preparer or tax consultant examinations given by the state of Oregon to also pass the IRS competency examination. Similarly, the IRS required individuals to take the competency examination even if they had taken and passed the test in taxation offered by the Accreditation Council for Accountancy and Taxation (ACAT) which is recognized to demonstrate competency for regulatory purposes in various states, including Delaware, Iowa, and Minnesota.

Accordingly, NSA strongly recommended that any legislation requiring federal tax return preparers to demonstrate competency in tax matters should provide that (1) such competency is shown if an individual passes an examination accepted by any state as evidence of competency; and (2) such individuals should be exempt from any IRS test. In short, those who have taken and passed an ACAT examination or those who have taken and passed the Oregon tax exam should be exempt from IRS testing


John Ams 
John Ams
Executive Vice President
National Society of Accountants

3 Comments

  1. 1 Richard P Allen EA ABA RTRP 09 Feb

    As a long time tax professional, I believe that "grandfathering" should NOT be done.   I had chosen to take the RTRP exam, and passed easily.  NO ONE should be EXEMPT from a RTRP-type exam.   If they want to prepare returns they should demonstrate their proficiency PERIOD.

    In fact, being a CPA, EA or Attorney does not mean the person is proficient NOW.   I would be in favor of retesting all Tax preparers every 5 to 10 years in order to demonstrate they are still proficient.

  2. 2 Skip McQuaid 04 Jan
    Anytime Congress is involved in ANYTHING it is going to get screwed up.  But should a test be mandatory - absolutely.  But to exempt lawyers and CPA's who may or may not know a single solitary thing about taxes is wrong.  The CPA portion on taxes bordered on rediculous.  I got through two years of law school without learning anything at all about taxes.  The only exemptions ought to be EA's, ATP's, ATA's, state exams and possibly other situations that meet the same requirements as the aforementioned.

    Dr. C. L. McQuaid, P.hD.,CPA,EA - and some other stuff I can never remember....
  3. 3 Robert D Flach 21 Dec

    JA-

    While I do not want the idiots in Congress to legislate mandatory tax preparer regulation, I do agree that if this does happen, those who pass a state exam, with federal tax issues included, or an ACAT tax exam, or the similar tax exam of any other accreditation organization, should be exempt from any test.

    I do not believe that CPAs or attorneys who want to prepare 1040s for compensation should be exempt from either the test or the CPE requirements.

    I do believe that there should be "grandfathering" for long-time experienced tax preparers who can demonstrate a minimum number of annual CPE over the past few years.

    Hopefully, though, Congress will not pass any tax preparer regulation legislation.

    RDF

Comment

  1.