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Interesting:
http://www.accountingtoday.com/news/IRS-Loses-Lawsuit-Challe...

One thing I don't understand:
"He noted that the IRS’s continuing education requirements only just went into effect on January 1."

Huh? I'm pretty sure a certain number of hours per year of continuing education has been in effect for many years. Or maybe that was just the State of California?

RB
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Huh? I'm pretty sure a certain number of hours per year of continuing education has been in effect for many years. Or maybe that was just the State of California?

Must have been CA. The IRS only required CE for EAs. CPA and attorney organizations required CE for their constituents. Unenrolled preparers had no CE requirements.

Ira
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The IRS is also appealing the decision, and they have asked that the injunction be stayed pending the appeal. We'll see if that happens.

Bill
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This issue has finally migrated over here. I've been batting it around with other tax professionals on another board for the last week.

The suit was over the IRS's ability to regulate all tax preparers. While only attorneys, CPAs and EAs have been able to represent taxpayers in audits and other matters with the IRS for many years, pretty much anyone could hang up a shingle and call themselves a tax preparer. The only restrictions on being a tax preparer have been at the state level.

So a couple of years ago, the IRS announced a plan to start regulating every tax preparer. They were to become Registered Tax Return Preparers, or RTRPs. To be an RTRP, you had to pass a competency exam. Then you would need some continuing education annually. Without this, you could not prepare tax returns.

A couple of preparers balked at this system, and sued the IRS. Last Friday, they won and a judge issued a permanent injunction against the IRS prohibiting them from implementing the RTRP program.

Needless to say, this has caused some confusion.

There are something like 700,000 or 800,000 unregistered tax preparers in the country. They outnumber the total of CPAs, EAs, and attorneys signing tax returns by something like 2 or 3 to one. That's a lot of people who need do nothing other than buy a copy of TurboTax to be in business.

Granted, a great many of these preparers do a fine job. But the IRS has been out to improve the quality of tax preparers for a number of years. This mandatory program was their attempt at enforcing some standards on the industry.

We'll have to see where things go from here. If I had to make a guess, it would be that the RTRP program survives, but becomes voluntary rather than mandatory. That would have to be followed up with some significant taxpayer education efforts by the IRS to explain to Joe six-pack why they should use one of these designated professionals (RTRP, EA, CPA, lawyer) to prepare their taxes rather than an unregistered preparer.

--Peter
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Peter thanks for posting - the background is very interesting.

Gordon
Atlanta
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"The suit was over the IRS's ability to regulate all tax preparers"

I read that the suit was that the IRS has no legal authority to make up such a regulation; that it's up to Congress, which did NOT do so.

"Granted, a great many of these preparers do a fine job. But the IRS has been out to improve the quality of tax preparers for a number of years. This mandatory program was their attempt at enforcing some standards on the industry. "

Somehow I doubt their real concern is quality. That's like belieeving the FDA's concern is drug safety ;)
Probably more like a fee raising endeavor or some such tactic.

I doubt CPA's have any higher quality than non-CPA's. Not in my experience, nor in the articles I have read.
I've known a few CPA's who hardly knew basic bookkeeping rules. I would trust Turbo Tax before taking their word for anything.

Also, every year there was a test done of a random sample of CPA's whereby they were given a fake scenario on which to prepare a tax return. The results were WIDELY different. One of them, I remember, ranged from a bottom line of 150K tax due to 50K refund. Nice quality control!

RB
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It's pretty much a non-issue here. Oregon has required licensing of tax preparers for a lot longer than I've been doing taxes and 30 hours of continuing education per year. I usually get about twice that many hours.
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Continuing education...

I went to a workshop for psychologists once. Taught by a professor from Harvard who wrote at least two books on the subject. It was interesting. I got 6 continuing credits for taking it. Just the thing to keep my psychologist's license current. But I have (and had) no such license, since I took only Psych 101 and Psych 102 in college about 50 years ago, and none since. But they gave the credits to anyone who took the course, and it never occurred to the administrators that a non-professional would take it. ;-)
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I went to a workshop for psychologists once. Taught by a professor from Harvard who wrote at least two books on the subject. It was interesting. I got 6 continuing credits for taking it. Just the thing to keep my psychologist's license current. But I have (and had) no such license, since I took only Psych 101 and Psych 102 in college about 50 years ago, and none since. But they gave the credits to anyone who took the course, and it never occurred to the administrators that a non-professional would take it. ;-)
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I've often taken continuing ed. tax courses through the UW law school. And they know that quite a few of their participants are accountants.

Bill
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I went to a workshop for psychologists once. Taught by a professor from Harvard who wrote at least two books on the subject. It was interesting. I got 6 continuing credits for taking it. Just the thing to keep my psychologist's license current. But I have (and had) no such license, since I took only Psych 101 and Psych 102 in college about 50 years ago, and none since. But they gave the credits to anyone who took the course, and it never occurred to the administrators that a non-professional would take it. ;-)

I am a legal secretary, not a member of any professional associations, and I have taken a number of mandatory legal education courses to enhance my skills. I don't need the certificate so I just don't take it, but they'd give it to me if I want it. And I know that they know that nonprofessionals take their courses because they have sliding scales of cost based on whether you're a professional or not (and will need the materials).

MOI
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