Tax Lawyer's Blog

My tax preparer colleague, Bruce the Tax Guy, has responded to my recent post titled CPAs v. Unenrolled Preparers: The Tax Code Requires Good Accounting.

His post is titled Righteousness in Designation, which I have to say is an outstandingly clever title, even if it’s premise is inaccurate.

To understand the context of my reply to Bruce you should read both blog posts.

Here we go:

He started it (I’ve been using this one since I was 4 years old and it’s still got legs)

Robert picked this battle, not me.

I just wrote a simple post about tax return red flags and had the temerity to suggest that perhaps if a return were signed by a preparer who is licensed and regulated the chances of the return of being selected for audit (all other things being equal) might be lessened.

Robert has accused me of intentionally giving bad advice to my clients just to increase my fees, said that he doesn’t like lawyers and that I am a low-class individual and a fool.

Sweet kid.

I talk more about Robert’s use of the insult to marginalize his competition at the end of this post.

The presumption of competence is not a presumption of infallibility

Of course there are CPAs who screw up returns. Just as their are neurosurgeons who botch brain surgeries. But the fact that CPAs are imperfect does not and cannot confer on unenrolled preparers a higher status. Especially when study after study indicates that non-CPAs are even less perfect.

I concede and always have that there are some excellent unenrolled tax preparers. I even said that I thought Robert was one of them. You too, no doubt.

The problem I have is that Robert (and apparently now you) are presuming that the unenrolled preparer is superior to the CPA preparer. Robert has actually advised taxpayers to choose an unenrolled preparer over a CPA preparer.

But why? There is no logical explanation for it.

Again, CPAs are unenrolled preparers who have accounting licenses. How could the fact that they have accounting licenses make them worse preparers? Just what did they learn in all those accounting classes that makes them suck at tax preparation?

If you and Robert became CPAs tomorrow would the designation somehow suddently make you inferior tax preparers?

Silly, right?

Studies show that unenrolled preparers are more likely to make errors on returns than are CPA preparers (don’t kill the messenger)

It isn’t CPA tax preparers Ms. Olson wants the IRS to investigate more closely. And it wasn’t CPA tax preparers that the Hite study concluded are screwing up returns.

I did not conduct the studies, they did. I merely cite them.

It seems obvious to me that you and Robert are attempting to slay the messenger. Why not reserve your vitriol and righteousness in (non)-designation for Nina Olson and Patty Hite? Or, better yet, for the incompetent, unscrupulous unenrolled preparers who are giving you an undeserved bad name.

I never said Robert had no credibility

I have reviewed all of my posts and comments on this topic and cannot find where I said or even suggested that Robert had no credibility. Again, I happen to believe that he is a good if not excellent tax preparer. I read his blog every day and quote it often. His blog is on my blogroll (mine is no longer on his) along with the blogs of CPAs and tax attorneys and IRS Enrolled Agents.

Does that sound like I think he has no credibility?

Of course it doesn’t.

Robert has on many occasions accused both CPAs and lawyers of being dishonest as a type

I do find Roberts routine and cavalier comments about the integrity and character of CPAs and lawyers both obnoxious and self-serving. Now you have seen fit to follow suit suggesting that CPAs have the nerve to be in the business of tax preparation simply to make money.

Well, Bruce, I know of no one who chooses to dedicate themselves to tax preparation and the study of tax law for purely aesthetic reasons. Preparing a tax return isn’t going to induce anyone to confuse us with Mozart or Van Gogh.

Of course CPAs want to make money. And in that we are no different than the rest of the civilized world, including unenrolled tax preparers.

Once again, this is an attack on character not on qualifications.

I think I know the reason why the unenrolled preparer feels he must attack the character of the CPA preparer. It’s because any challenge he makes to the CPA’s qualifications would be absurd and hypocritical. The unenrolled preparer has fewer qualifications!

CPAs are regulated. They annually meet professional standards set by others, not themselves. The same is untrue for unenrolled preparers.

(Yes, all preparers must comply with Circular 230, but that applies to CPAs as well as unenrolled preparers.)

The pompous ass charge (why is it that someone can’t just be pompous without also being an ass?)

You call me a pompous ass for pointing out this truth: The tax code imposes a good record keeping requirement on all taxpayers and their tax preparers and CPAs are trained in bookkeeping and accounting, ergo….

What’s so pompous about that?

True pomposity (without the ass)

Robert has on several occasions accused me (he doesn’t know me at all apart from reading my blog) of advising taxpayers to do certain things merely because I wanted to fatten my own wallet.

He has specifically expressed his disdain for all lawyers. That’s more than one million people. Damn, I can’t think of one person I dislike, much less a group larger than the entire population of Swaziland.

Robert has developed a substantial ouvre of insults against just about everyone who has spent the money and time to become a CPA or a lawyer.

Here’s just a few of his greatest hits along with a some comments of my own:

Pejorative comments Robert left on my blog:

May 15, 2009 – 7:07 AM – Comment – 59 Tips for the Self-Employed – Robert Says I Advice My Clients to Incorporate Just to get More fees

The first “tip” I offered in this blog post was simply that small business owners should  “incorporate.” Rather amazingly, Robert took exception to that piece of ubiquitous advice and suggested that I included it merely to hoodwink people into giving me money.

Here’s what he said:

I am not surprised that a lawyer would list “incorporate” as #1. As a general rule lawyers often get a huge fee for having their secretary type up some proforma papers and selling a corporate “kit”. (Emphasis Added)

May 15, 2009 – 10:19 AM – Comment – 59 Tips for the Self-Employed- Robert Says He Dislikes Lawyers In General and CPAs Charge Excessive Fees

Robert continued to suggest that I (and/or CPAs and attorneys in general) regularly advise clients to do things they don’t need to do just to increase fees:

Chill, man. Sorry if I hit a nerve . . . . 

[T]here is a big difference between charging a reasonable fee appropriate to the services provided and gross overcharging or selling a “product” solely based on the potential for income to the seller and not to properly meet the genuine needs of the client.

I am incensed when I see what Henry and Richard and their ilk charge clients for even simple returns. And I truly believe that more often than not when a taxpayer uses a CPA to prepare a 1040 (and not as part of a total business relationship) the client pays twice the price for half the service.

As for attorneys in general – I admit that, based on 37 years of dealing with the public, I am not the biggest fan of members of the legal profession. (Emphases Added)

Apparently Robert has never entertained the thought that he might be charging too little.

It should be noted that one of the things the taxpayer who hires a CPA pays extra for is the CPAs malpractice insurance. Most CPAs carry it. I’d be willing to bet my next paycheck Robert doesn’t. In fact, I wonder if malpractice insurers even underwrite policies for unenrolled preparers? They might consider it too risky.

June 30, 2008 – 2:23 PM – Comment – Wandering Tax Pro Responds, Pappas Dons Flach Jacket - Robert Says that a CPA Designation Makes You a Worse Tax Preparer than If You Didn’t Have that Designation at all”

And here is one of Robert’s many self-serving and patently absurd comments about how CPAs are actually worse tax preparers than people who lack that designation:

As I have said before, and as I recently found has been said by several other tax professionals in a message board, in 37 years I have found more errors on tax returns prepared by CPAs than by any other category of tax preparer – including Henry and Richard (that’s Robert’s derisive nickname for H&R Block) and self-prepared returns!

June 30, 2008 – 7:01 PM – Wandering Tax Pro Responds, Pappas Dons Flach Jacket (Unpublished Comment) – Robert Calls Me Low Class

After I pointed out the absurdity of his bald and ridiculous assertions about CPAs having been made dumber by their accounting training Robert, apparently mortally offended, said this,

Sorry I wasted your time, and mine. I have better things to do.

In the future I will chose a better class of individual to engage in intelligent debate.

That’s not very nice now is it?

Pejorative comments Robert wrote on his blog:

I am not the only CPA Robert has chosen to defame. He accused Martin S. Kaplan, CPAof recommending that taxpayers hire only CPAs, Enrolled Agents or Tax Lawyers to prepare their returns solely because Kaplan himself happens to be a CPA:

I wish to take exception to two of the “10 Questions to Ask a Tax Preparer”suggested in an article by Martin S Kaplan CPA.

Question #3 is “Are you a licensed CPA? Enrolled Agent? Tax Attorney?”

Kaplan tells us to “stick with tax preparers who have one of these designations”.

You will notice the initials after Kaplan’s name.

Robert is charging Kaplan, a man whom I assume he does not know, with dishonesty and a lack of integrity. He is saying that Mr. Kaplan is telling taxpayers to hire only tax preparers who are regulated not because he believes them to be more qualified, but because he himself is a CPA and merely wants to make more money.

The pot and the kettle

As illustrated above, Robert has a long history of going on the attack against lawyers, CPAs and just about everyone who holds a designation or certification he lacks. Now someone is fighting back and he doesn’t like it so much. But the fact that he doesn’t like it doesn’t make it any less true.

My unsolicited advice to Robert is this: If you’re going to impugn an entire profession you should, a) make sure you have all of your evidentiary ducks in a row; and b) thicken your skin and brace for a counter attack.

The fact that some CPA preparers screw up is irrelevant

Allow me to repeat a previous observation because it bears reiteration.

You (Bruce) seem to be suggesting that because some CPA preparers do poor jobs, it means that unenrolled preparers are superior to CPA preparers in general. This argument is illogical, irrational and, I’m afraid, sophomoric. It would be like arguing that because a heart surgeon botched a triple by pass people who are not heart surgeons are better heart surgeons.

I never suggested nor do I now suggest that CPA preparers never make mistakes. I am merely saying that the CPA preparer is more likely than the unenrolled preparer to get it right. I have cited two separate and distinct studies (here and here) that have reached the very same conclusion.

Bruce, I admit that I have had to fix some faulty CPA preparer returns in my career, but by far I’ve been called upon to fix more faulty unenrolled preparer returns. For every story you or Robert can relate about a CPA preparer screwing up a tax return, I can give you 20 about unenrolled preparers screwing them up.

Apparently so can Patty Hite and Nina Olson.