By Benjamin Goad - 05/21/14 02:48 PM EDT
The nation’s accountants are staging a pre-emptive strike against an expected move by the Internal Revenue Service to impose voluntary education standards for tax preparers.
The American Institute of Certified Public Accountants (AICPA) sent a letter Wednesday urging IRS Commissioner John Koskinen to abandon the rumored plan.
The action follows the agency’s failed bid to enact mandatory regulations designed to crack down on unscrupulous and unqualified tax preparers.
A federal appeals court blocked that effort in February, concluding in a case known as Loving v. IRS that the agency overreached by trying to implement continuing education requirements for hundreds of thousands of tax return preparers.
The IRS decided against asking the Supreme Court to take up the case, with Koskinen suggesting a voluntary certification program may be in order.
That system, the AICPA argues, would create implied government backing for those preparers who comply with the standards, while punishing those who do not.
“The proposed voluntary system would undoubtedly leave the impression among most taxpayers that certain tax return preparers are endorsed by the Internal Revenue Service (IRS),” according letter.
Further, nonbinding standards would fail to root out bad actors, according to the group.
“As a practical matter, any voluntary regime constructed would still not address the problems with unethical and fraudulent tax return preparers,” the group contends.
Rather than propose voluntary regulations, the IRS should focus its efforts on educating taxpayers and using the industry’s current preparer tax identification number program to identify “patterns of fraud and incompetence.”