Page 7 - VTaxOnDemand Independent Industry Analysis of Accounting Industry

d. California
2.) There are unregulated 600,000 paid tax preparers in the U.S. 6
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3.) ~42 million Americans use unregulated tax preparers
4.) Last year, a Government Accountability Office investigation of all professionally
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prepared taxes found that 60 percent contained errors.
5.) The National Taxpayer Advocate estimated that more than 76 percent of preparers who
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prepared returns claiming the EITC did not have a professional credential.
10
6.) Some 60 percent of EITC recipients use a paid preparer to complete their tax return, a
figure that actually may be low, since many paid preparers do not sign the return, even
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12
though they are required by law to do so. And more than three quarters of those
preparers are unenrolled.
7.) A recent poll conducted by CFA as part of the new Tax Time report found that 80% of
the public supports requiring paid tax preparers to pass a test administered by the
government that would ensure that paid preparers have the knowledge and training to
complete taxpayer returns correctly, while 83% of respondents support licensing
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requirements for preparers.
8.) Annual Filing Season Program
a. The Program allows these unenrolled preparers to apply for a “Record of
Completion,” which the IRS will issue “[u]pon verification that the requirements
in section 4 of this revenue procedure have been met.” Id. § 4. Those
requirements include, inter alia, (a) obtaining a preparer-tax identification
number, (b) taking an annual “federal tax filing season refresher course,” (c)
passing a comprehension test, (d) completing a minimum of fifteen hours of
continuing education annually; and (e) consenting to be “subject to the duties and
restrictions relating to practice before the IRS in [specified portions] of Circular
230. 14
9.) Congressional Bills
th
a. 114 Congress: H.R. 4141 Tax Return Preparers Competency Act of 2015
i. This bill grants the Department of the Treasury authority to regulate the
practice of tax return preparers and to sanction preparers for incompetency
or misconduct. The bill also imposes minimum competency standards for
tax return prepares and requires Treasury to make publicly available a
database identifying qualified tax return preparers.

Overcharging of Fees and Improper Disclosure
1.) Refund Anticipation Loans and Refund Anticipation Checks

6 http://time.com/56727/tax-scams/
7 http://time.com/56727/tax-scams/
8 http://www.theatlantic.com/business/archive/2016/04/eict-tax-prep/478305/
9 http://dailycaller.com/2016/04/25/tax-preparer-bill-stops-fraudsters-from-profiteering-off-mammoth-tax-code/
10 https://www.irs.gov/pub/tas/nta_testimony_houseppprops_oversight_022614.pdf
11 https://www.law.cornell.edu/cfr/text/26/301.7701-15
12 https://www.irs.gov/pub/tas/nta_testimony_houseppprops_oversight_022614.pdf
13 https://consumerist.com/2016/03/30/unregulated-preparers-lack-of-disclosures-costly-financial-products-put-your-
tax-refund-at-risk/
14 http://www.forbes.com/sites/peterjreilly/2016/08/09/aicpa-has-no-standing-to-litigate-irs-credential-
program/#520b6a445697

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