New Internal Revenue Service (IRS) regulations will force paid taxpayers to register with the government, pass competency tests and adhere to ethical standards, according to an announcement made Monday. The new regulations will not go into effect for the current tax year, due April 15th.
IRS Commissioner Doug Shulman said "As tax season begins, most Americans will turn to tax return preparers to help with one of their biggest financial transactions of the year. The new regulations will help ensure taxpayers receive competent, ethical service from qualified professionals and strengthen the integrity of the nation's tax system."
The IRS hopes to have all paid tax preparers registered in time for next year's tax season. In terms of competency exams, there will be a three year grace period for meeting those standards.
Paid tax preparers are unregulated in many states, unless they are also lawyers, CPAs or enrolled agents who represent taxpayers before the IRS. Meanwhile, more than 80 percent of taxpayers use a paid preparer or tax software such as Turbotax or Taxcut to complete their annual returns.
Lawyers, CPA, and enrolled agents are already regulated, through their own professions. The IRS is only pursuing those who do not fit into those categories. Under current law, anyone can prepare a tax return, with virtually no standards.
All paid tax preparers not fitting into the above will have to register with the IRS and obtain a identification number which will be included on any returns they prepare. Besides passing a competency test, paid preparers will also have to meet continuing education requirements.
The first announcement of the proposed new rules was made in June of 2009. A series of public hearings followed, leading up to Monday's announcement.
Written by Michael Santo
HULIQ.com
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