Wednesday, September 5, 2012

IRS Form 14157: Anonymity Issues?

U.S. Internal Revenue Service (IRS) Form 14157 (PDF), Complaint: Tax Return Preparer, allows taxpayers to report a tax return preparer or tax prep firm for illegal behavior. The form can be submitted anonymously, which critics say increases the potential for abuse. (The form does include an area where taxpayers can include contact information to allow the IRS to follow up with them, but the field is not required.)
Tax preparer Trish McIntire, an Enrolled Agent (EA), raises the following questions:
  • How can a preparer respond to an anonymous complaint?
  • Will the IRS initiate an investigation whenever a Form 14157 is filed, or will it take more than one complaint?
  • When will a preparer be notified that a complaint has been filed against him or her?
  • If enough Forms 14157 are filed, will the IRS assume there is a real problem?
It's worth noting that Form 14157 has its uses for tax preparers as well — it's the form preparers can use to report that someone else is using their Preparer Tax Identification Number (PTIN) to prepare returns. We should also point out that the VSCPA allows anonymous complaints against CPAs, as do the Virginia Board of Accountancy (VBOA) and the American Institute of CPAs (AICPA). Read the VSCPA's article on the form to learn more about which forms are made public.

What do you think? Does the usefulness of Form 14157 trump the potential for abuse? What other potential problems could the form create?

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