I.G. report: IRS oversight of tax preparers will take years

An IRS initiative to register and monitor paid tax preparers will not be fully implemented until 2014, according to a new government report.

The Treasury Department’s inspector general for tax administration found that the IRS program, announced last year, did not have adequate systems or resources in place to collect information on tax preparers.

“Our review found that more needs to be done,” J. Russell George, the tax administration inspector general, said in a statement. “As a growing number of Americans now use paid preparers to file their returns, the IRS must move forward expeditiously with its preparer oversight program.”

The IRS initiative would create identification numbers and competency tests for tax preparers and require preparers to take 15 hours a year in tax courses. 

But the audit found that it would take another three years before all paid preparers – of which there are roughly a million – had sat down to take the necessary tests in the program. It also reported that the IRS had reached out to stakeholders and the public on the plan to register preparers.

In its report, the inspector general recommended that the IRS devote sufficient resources to its program and to review existing programs.

The IRS agreed or partially agreed with three recommendations from the inspector general. In a response to the report, Steven Miller, deputy commissioner at the IRS for services and enforcement, acknowledged that the agency needed to know more about paid preparers and said it was conducting research to help the oversight program.  

“We will take appropriate actions to address or further review issues as they are identified,” Miller added.