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IRS to start regulating paid tax preparers

IRS to start regulating paid tax preparers

Associated Press via Yellowbrix

WASHINGTON – The Internal Revenue Service plans to start regulating paid tax preparers, requiring them to register with the government, pass competency tests and adhere to ethical standards.

The new regulations, announced Monday, will not be in effect for the current filing season – individual tax returns are due April 15. But IRS Commissioner Doug Shulman said tax preparers will be held to higher standards in future years as the IRS steps up its oversight.

“As tax season begins, most Americans will turn to tax return preparers to help with one of their biggest financial transactions of the year,” Shulman said. The new regulations “will help ensure taxpayers receive competent, ethical service from qualified professionals and strengthen the integrity of the nation’s tax system.”

Existing preparers will be given three years to meet competency requirements.

More than 80 percent of taxpayers use a paid tax preparer or tax software to complete their yearly returns. However, paid tax preparers are unregulated in many states, unless they are also lawyers, certified public accountants or enrolled agents who represent taxpayers before the IRS. Lawyers, certified public accountants and enrolled agents will not be affected by the new regulations.

The IRS announced in June that it wanted to start regulating paid tax preparers. The agency then held a series of public hearings to gather information, leading up to Monday’s announcement.

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