AICPA: Existing Law Sufficient to Regulate Preparers

The IRS already has authority to regulate currently unlicensed tax return preparers without additional legislation, the chair of an AICPA tax committee told the Service in a public forum Thursday in Washington.


Michael P. Dolan, chair of the AICPA’s IRS Practice and Procedures Committee, made the remarks during a panel presentation that heard from other tax professional groups, with an earlier panel focused on consumer and low-income taxpayer groups. This forum was the first of several planned open meetings held by the IRS as it formulates proposals to regulate all paid tax preparers.


Licensed preparers—CPAs, attorneys and enrolled agents—should be exempted from any new federal regulatory regime covering currently unlicensed preparers, Dolan said. Licensed preparers are already subject to Circular 230 regulations governing their practice before the Service, as overseen by the IRS’ Office of Professional Responsibility (OPR). CPAs and attorneys also are subject to requirements of state boards of accountancy and state  bars, respectively. And if they are members of professional organizations, they may be subject to those organizations’ codes of conduct, such as the AICPA’s Code of Professional Conduct and Statements on Standards for Tax Services.  


“Thus, we strongly advise against any result which would impose duplicative regulatory regimes on CPAs, attorneys and enrolled agents,” Dolan said.


The Service could extend the OPR’s role to include registration of currently unlicensed tax preparers, Dolan said. Moreover, penalties and civil remedies under existing law “should provide the Service with the ability to have a significant impact on incompetent preparers,” he said. Congressional concern over refund anticipation loans issued by some commercial preparers and high rates of erroneous earned income tax credit claims could be more directly targeted for solutions and may result in more tangible increases in compliance than a preparer registration proposal might yield, he said.


“The AICPA believes the Service already has sufficient authority to regulate federal tax return preparers without the need for an additional legislative grant of authority,” he said.


Legislation introduced in the last Congress included new requirements for qualifying exams and continuing education for currently unlicensed preparers. That bill died in committee, but a sponsor, Rep. Xavier Becerra, D-Calif., has said he will reintroduce it.


Thursday’s panel also included representatives of the National Association of Enrolled Agents, the National Association of Tax Professionals, the National Society of Accountants and the American Bar Association.


IRS Commissioner Doug Shulman announced during a hearing of the House Ways and Means Oversight Subcommittee on June 4 that the Service would present to Treasury Secretary Timothy Geithner and President Barack Obama before the end of this year a set of comprehensive recommendations for improving taxpayer compliance and ensuring uniform and high ethical standards of conduct for tax preparers.


Other public forums and meetings with a variety of groups will be held in the fall, as well as discussions this summer at  the IRS’ Nationwide Tax Forums. Last week, the IRS also released a request for written comments and responses to questions about preparer standards and taxpayer compliance.


Get your clients ready for tax season

Upon its enactment in March, the American Rescue Plan Act (ARPA) introduced many new tax changes, some of which retroactively affected 2020 returns. Making the right moves now can help you mitigate any surprises heading into 2022.


Black CPA Centennial, 1921–2021

With 2021 marking the 100th anniversary of the first Black licensed CPA in the United States, a yearlong campaign kicked off to recognize the nation’s Black CPAs and encourage greater progress in diversity, inclusion, and equity in the CPA profession.