Tax Preparer Registration Probably Not the Right Answer

Early this month, Internal Revenue Commissioner Doug Shulman announced that the IRS plans to introduce various recommendations to ensure tax preparers adhere to high ethical standards. Right now, the buzz is on a potential recommendation to implement a tax preparer registration program.

This is certainly not a new issue. For years, IRS National Taxpayer Advocate Nina E. Olson has been advocating for a registration program for unlicensed tax return preparers, and various bills to this tune have been introduced over the years.

I’m all for tax preparers adhering to high ethical standards — that’s why our members in tax adhere to the AICPA Code of Professional Conduct and Statements on Standards for Tax Services. But I’m skeptical that the current proposal to regulate unlicensed tax practitioners is the way to go.

The IRS already has authority to regulate tax return preparers through the penalty authority under current law, and I am concerned that implementing a registration system could potentially overburden tax practitioners.

Shulman indicated he is committed to gathering feedback from tax practitioners and other stakeholders throughout the process of creating a formal recommendation, and state CPA societies and the AICPA are actively monitoring this issue.