Paul Caron alerts us to a Case Western law review article written by Capital University law professor Danshera Cords titled Paid Tax Preparers, Used Car Dealers, Refund Anticipation Loans, and the Earned Income Tax Credit: The Need to Regulate Tax Return Preparers and Provide More Free Alternatives. 59 Case W. Res. L. Rev. 351 (2009).
Professor Cords hits the nail square on the head with the following sentence:
Increased regulation of currently unregulated tax preparers would benefit taxpayers who currently rely on these preparers and do not realize that many are not lawyers or CPAs.
If I were given a quarter every time someone came to me for help after having had their tax return incompetently prepared by an unenrolled preparer whom they believed to be a CPA, I’d never see another ticket for a lapsed parking meter again in my lifetime.
3 responses so far ↓
1 Tony // Nov 9, 2009 at 5:10 pm
The problem with regulation of tax preparers is that there appears to be no definition of what is tax preparation. Many entities have a CPA firm to complete their annual tax return and provide tax planning but rely on employees or independant servicers for other forms. These include Forms 941, 940, W-2, 1099-Misc, 8300, etc. While errors in any of these forms can be quite costly they do not represent the kind of abuse the IRS is trying to limit. IRS regulation of preparers should be limited to individual tax returns, Forms 1040 and its variants or perhaps corporate and partnership returns as well. Otherwise businesses will be forced to pay outrageous prices for simple reporting processes.
2 Peter // Nov 10, 2009 at 8:57 am
Hi Tony,
There is probably no return more difficult to prepare than a complex 1040, but partnership returns and corporate returns can also be quite complex.
Also, in order to prepare a good business return -whether it be a Schedule “C”, an LLC, an S corporation, a C corporation or a partnership return – a sound grounding in accounting is absolutely essential.
This is why CPAs are natural tax preparers even though not all CPAs choose to be tax preparers.
3 WebCPA Tax Advice: Avoid IRS Audit by Hiring Licensed Tax Preparer // Nov 12, 2009 at 12:10 am
[...] Beware the CPA Imposter [...]
Leave a Comment