Is there anyone else in America right now with lower public appeal than the IRS? If so, they must be approaching pond scum territory. Of course, the IRS starts out in a difficult position just doing its job, since no one likes to deal with, or has fond feelings for, the tax collector. But they have taken their natural disadvantage and put it on steroids over the past few years. (See my blog post from 4/1/13.) The most recent blunder by the IRS was losing many emails that just happened to occur during the time period several House committees are investigating them.
Another image blow for the IRS was its program to register and regulate tax return preparers. A few years ago, the IRS decided to implement a mandatory program to provide oversight to those who prepare tax returns for the public. They just forgot one small detail – they did not have the legislative authority to implement the program. Oh, they thought they did and they argued they did, but when a group of tax preparers filed a lawsuit against the IRS, the courts at several levels quite clearly told them they did not. So, all the work and effort expended on setting up this system of regulating tax return preparers went down the tubes. That is, until this past week.
Now, the IRS has decided to move forward with a voluntary tax return preparer certification program. It published its guidance on an Annual Filing Season Program, which permits tax preparers who are not CPAs, attorneys or enrolled agents to complete tax education requirements and receive a certificate, called a “record of completion” (see Rev. Proc. 2104-42).
At a press conference, IRS Commissioner John Koskinen explained that the new program is both voluntary and temporary. He also referred to it as “not the ideal solution.” He could win “understatement of the year” for that one. The commissioner hopes that the “temporary” label doesn’t stick and that Congress will enact a proposal in the president’s budget that would give the IRS the authority for mandatory oversight of return preparers. Yes, I am sure all those Republican members of the House committees investigating his agency are just going to rally behind this brainstorm.
This new program has not been received warmly by all. While H&R Block expressed support for it (they are like the kid bringing the teacher an apple), AICPA and many others do not. In fact, AICPA has written a strongly worded letter to the IRS stating that it “would cause significant legal problems that may ultimately frustrate the IRS’s goals, confuse the public, and lead to litigation.” AICPA also believes that “the current proposal is arbitrary and capricious because it fails to address the problems presented by unethical tax return preparers, runs counter to evidence presented to the IRS, and will create market confusion.”
So stay tuned for the further adventures of the IRS to see how this latest episode turns out. The good news at this point is the only way their image can go now is up.