IRS rules for independent preparers tossed by court | News

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IRS rules for independent preparers tossed by court

JACKSONVILLE, Fla. -- In 2011, the Internal Revenue Service instituted new rules that require independent tax preparers to register, pay an application fee, pass a qualifying exam and take continuing education courses.

But several independent tax preparers objected and sued the IRS; on January 18, 2013, the United States District Court for the District of Columbia ruled the IRS did not have the authority to set the rules.

"I think they should be credentialed," said Linda Robinson.

Robinson, who just filed her return for 2013, said she is familiar with the problem of incompetent and fraudulent tax preparers.

"A lot of these people aren't necessarily honest," said Robinson. "I know some cases where people's money had been deposited into their preparer's account and they never received the money.

The court's 22-page decision does not affect the regulatory practice requirements for CPAs, attorneys, enrolled agents or enrolled actuaries.

Mark Patrick is a CPA with the firm Patrick and Robinson believes the IRS regulations are necessary.

"It is just not wise," he said, "to not know the competency of the individual doing the work."

Patrick is convinced that the rules also bring accountability.

"We often get returns we have to go and correct. We have to deal with cleaning up or defending things that are wrong."

Patrick said even though the rules are banned for now, there are still things you should do in choosing a tax preparer.

-Check the person's credentials or background

-Talk to references

-Find out if the preparer belongs to a professional association

-Ask if the preparer can represent you before and after an IRS audit.

Robinson, like Patrick, believes regulation is necessary before the tax season get into full swing.

"It is a job and they should be credentialed to some degree," said Robinson.

IRS spokesperson Michael Dobzinski said the IRS has asked the court to lift the injunction. 

"Regardless of the outcome of that request, an appeal is planned  within the next 30 days," his statement read.

The IRS is evaluating the scope of the court order to determine its next step and how it will require tax preparers to have a Preparer Tax Identification Number (PTIN) for the filing season.


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