six solutions offered.
by 卡塔尔世界杯常规比赛时间 research
are you a sleazy, incompetent, unethical tax preparer?
if so, no problem! not for you, anyway. your clients might suffer, but as far as the internal revenue service is concerned, you’re as qualified to prepare other people’s taxes as any cpa or enrolled agent.
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and that’s a problem.
a wild west environment
tax preparers good and bad prepare over half of the country’s individual income tax returns. they play an essential role in tax administration, and they are a frontline defense in preventing fraud and error.
many of them, however, have no credentials, have never met minimum standards and have no interest in continuing education. they have no institutions behind them, no licenses to lose. and some are even worse, using their expertise to enrich themselves at the expense of unwitting clients of their own government.
national taxpayer advocate erin m. collins came right out and said it: “the current unregulated state of the preparer industry sometimes lends itself to a ‘wild west’ environment that victimizes taxpayers.”
the nta’s annual report to congress cites some examples:
- a utah accounting firm was charged with claiming over $11 million in fraudulent employee retention credits on behalf of clients.
- a preparer in new jersey was arrested after filing more than 1,000 false tax returns claiming over $124 million in tax credits.
- an ohio preparer was charged with filing returns without approval from clients and even forging client checks.
- a california firm prepared thousands of returns reporting improper deductions, including mortgage interest for taxpayers who did not own homes.
- another california preparer stole client identities and used their data to file fraudulent returns.
- other rip-offs include using the filing process to sell high-priced loans, theft of refunds, theft of identity, and conspiring with banks and financial technology companies.
worse than a bad haircut
ethics isn’t the only problem. sheer incompetence creates a lot of problems, especially for taxpayers of lower income. irs statistics show that non-credentialed preparers generate a disproportionate level of audit adjustments. for example, a staggering 94 percent of the dollar value of audit adjustments on returns claiming earned income tax credit were for returns prepared by non-credentialed preparers.
as the national consumer law center points out, “there are more regulatory requirements for hairdressers than for tax preparers. yet the impact of a bad haircut is far less damaging than an inaccurate tax return.”
the nta lists five main concerns regarding non-credentialed preparers:
- the preparers harm taxpayers – especially those of lower income. these taxpayers are more likely to claim eitc and to hire the least expensive preparer they can find. the consequent errors, often innocent mistakes, can be catastrophic for the taxpayer but not for “ghost preparers” who fail to sign the returns.
- stakeholder calls for preparer regulation have gone unheeded. taxpayers, the american institute of cpas, the government accountability office, the consumer financial protection bureau, the electronic tax administration advisory committee, the national association of enrolled agents and the irs have all called for regulatory legislation.
- legal limitations present an obstacle to oversight. court decisions prevent the irs from regulating all preparers or establishing educational minimums or other qualifications.
- the non-credentialed lack incentives to voluntarily come within the established oversight umbrella. the irs has authority only over preparers who voluntarily subject themselves to regulation.
- administrative deterrents to bad behavior are insufficient. the irs has limited power to assess and collect penalties for preparer errors and malfeasance. in 2020, the irs assessed only 352 preparer penalties, 96 percent of them against non-credentialed preparers. of the total $20 million in penalties, only 8 percent was collected.
recommendations
the nta made four recommendations to the irs and two to congress.
to the irs:
- make efforts to educate taxpayers on the benefits of credentialed preparers.
- increase publicity about volunteer income tax assistance and tax counseling for the elderly programs.
- vigorously enforce preparer penalties.
- consolidate authority within a single function to be responsible for all matters regarding tax return preparation to better protect taxpayers from incompetent or unscrupulous return preparers.
to congress:
- amend title 31 of the u.s. code to authorize the treasury secretary to establish minimum standards for paid preparers.
- amend internal revenue code § 6109 to allow the secretary to revoke preparer tax identification numbers concurrently with assessment of sanctions for violations of minimum standards for return preparers.