2010

    Press Release


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    House Members Tell Secretary Geithner of Concerns Regarding IRS Proposal to Regulate Tax Return Preparers 


     

    Thirty-one members of the U.S. House of Representatives sent a bipartisan letter to Treasury Secretary Timothy F. Geithner urging changes in the Internal Revenue Service’s proposed plan to regulate paid income tax return preparers.  The House lawmakers are asking Treasury and the IRS to exempt non-signing tax preparers -- employees of CPA firms who prepare returns but do not sign them – from onerous registration requirements. Lawmakers are further asking for a delay and more study of an IRS proposal to create a poorly defined nationwide examination of tax preparers. 

     

    Representative Brad Sherman, a Democrat from California, and Representative Michael Conaway, a Republican from Texas, and their colleagues said the IRS should modify its proposal:

     

    1. Requiring IRS registration of non-signing preparers who work for CPA firms is unnecessary because state boards of accountancy already regulate CPA firms and individual CPAs and because the IRS will be able to monitor the quality of the CPA firms’ work through the preparer tax identification numbers (PTINs) of the CPAs who sign the tax returns.  The PTIN numbers will be assigned by the IRS when the CPAs register and will have to be included on all the tax returns they sign. The IRS has already excluded CPAs from the proposal’s examination and continuing education requirements because they are regulated by the state accountancy boards and Treasury Circular 230, the rules governing practice before the IRS, so there is “strong justification for NOT expanding the PTIN requirement beyond signing preparers in CPA firms with no adverse effect to the public.”  Further, extending PTIN registration to non-signing preparers in CPA firms will add a burden to the firms’ tax preparation work with resulting increased costs that will be billed to clients. 

     

    1. Implementing a requirement for an IRS examination of tax return preparers other than attorneys, CPAs and enrolled agents should not occur until the IRS has demonstrated the need for such testing.  The proposed examinations will burden IRS and return preparer resources and result in increased tax preparation costs for which there is no demonstrated need.  “We are also unconvinced that such testing will be effective in eliminating return preparation problems encountered by the IRS.”  The PTIN regime will give the IRS the capability to track and discipline incompetent preparers, and the process alone will raise the competency of preparers to an acceptable level. 

     

    “We believe that the IRS has neither demonstrated the need for extending the non-signing preparer requirements to CPA firms nor that its proposed testing program merits shifting IRS resources away from other mission-critical programs.  We believe that any testing program should be deferred until the IRS has performed an adequate study to determine the level of return preparation problems caused by a lack of preparer competence and whether testing would have a meaningful effect on reducing those problems.”

     

    The following nine members of the House Ways and Means Committee signed the letter:

     

    ·         Representative Earl Pomeroy, a Democrat from North Dakota

    ·         Representative Mike Thompson, a Democrat from California

    ·         Representative Kevin Brady, a Republican from Texas

    ·         Representative Eric Cantor, a Republican from Virginia

    ·         Representative Geoff Davis, a Republican from Kentucky

    ·         Representative Dean Heller, a Republican from Nevada

    ·         Representative Devin Nunes, a Republican from California

    ·         Representative Peter Roskam, a Republican from Illinois

    ·         Representative Patrick Tiberi, a Republican from Ohio

     

    The other House members who signed the letter are:

     

    ·         Representative Joe Baca, a Democrat from California

    ·         Representative John Barrow, a Democrat from Georgia

    ·         Representative Allen Boyd, a Democrat from Florida

    ·         Representative Travis Childers, a Democrat from Mississippi

    ·         Representative Chris Murphy, a Democrat from Connecticut

    ·         Representative Scott Murphy, a Democrat from New York

    ·         Representative Ed Perlmutter, a Democrat from Colorado

    ·         Representative Collin Peterson, a Democrat from Minnesota

    ·         Representative Nydia Velazquez, a Democrat from New York

    ·         Representative Charles Wilson, a Democrat from Ohio

    ·         Representative Spencer Bachus, a Republican from Alabama

    ·         Representative John Boozman, a Republican from Arkansas

    ·         Representative Ken Calvert, a Republican from California

    ·         Representative John Campbell, a Republican from California

    ·         Representative John Duncan, a Republican from Tennessee

    ·         Representative Lynn Jenkins, a Republican from Kansas

    ·         Representative Walter Jones, a Republican from North Carolina

    ·         Representative Frank Lucas, a Republican from Oklahoma

    ·         Representative Erik Paulsen, a Republican from Minnesota

    ·         Representative Greg Walden, a Republican from Oregon

     


    A copy of the Aug. 2 letter was sent to IRS Commissioner Douglas Shulman.  The letter is available at

     

    http://www.aicpa.org/Press/PressReleases/DownloadableDocuments/LettertoSecretaryGeithner

    .pdf

     

     

     

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