Tax preparers revolt over IRS regulations

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The American Institute of Certified Public Accountants is urging the leaders of the House Ways and Means Committee to oppose legislation giving the Internal Revenue Service broad authority to regulate tax return preparers.

The group is looking to beat back the Tax Return Preparer Competency Act, which was introduced last week by Reps. Diane BlackDiane BlackHouse approves bill to shield anti-abortion healthcare workers Conscience rights under threat in US HHS chief meets with House Republicans on abortion dispute MORE (R-Tenn.) and Patrick Meehan (R-Pa.). The legislation would require professional tax return preparers to submit to background checks and take examinations and continuing-education classes.

"We believe the Tax Return Preparer Competency Act allows the IRS to over-regulate professional, credentialed tax return preparers and their staff without providing adequate value to taxpayers or additional protection to the public," the AICPA said in the letter sent Friday to Ways and Means Committee Chairman Kevin BradyKevin BradyAdvisers: Trump's revised tax plan will resemble Ryan's Overnight Healthcare: Health mergers in trouble? | Norovirus in Cleveland | GOP chairman rejects Trump Medicare pricing plan GOP chair won't back Trump on negotiating Medicare drug prices MORE (R-Texas) and ranking member Sandy Levin (D-Mich.).

Many in Congress have been interested in legislation authorizing the regulation of paid return preparers since a federal appeals court ruled in 2014 that the IRS overreached in its regulation of them. But the AICPA has expressed concerns about measures to do so.

Some Republicans have also expressed concerns about giving the IRS more authority in the wake of the agency's targeting of Tea Party groups. In September, Senate Finance Committee Chairman Orrin HatchOrrin HatchBacteria found ahead of Olympics underscores need for congressional action for new antibiotics Burr pledges to retire after one more Senate term Leaders appoint allies, adversaries to Puerto Rico growth task force MORE (R-Utah) decided at the last minute not to move forward with the committee's consideration of a measure that would give the IRS more power to regulate preparers.

While the bill from Black and Meehan intends to address “fly-by-the-night tax preparers," the legislation would require all preparers to satisfy continuing education requirements. The group said that CPAs and lawyers are already highly regulated and subject to testing and education requirements and should not be subject to duplicate requirements.

"We also strongly urge you to specifically exempt in the statute credentialed preparers and their non-signing staff from the examination and background checks as opposed to granting the Secretary discretion," the AICPA said.

Instead of enacting rules that apply to credentialed tax return preparers, the AICPA said that Congress should mandate that the IRS enact a testing and education program that applies exclusively to prepares that are not licensed by the states. 

The group also had some recommendations concerning preparer tax identification numbers (PTINs). It urged Congress to allow the IRS to revoke a PTIN for failure to comply with regulations. It said that legislation should address the requirement that non-signers of tax returns obtain preparer tax identification numbers, which is "burdensome." And it said Congress should require unlicensed PTIN holders using paid advertising to make certain disclosures in the ads.