Finally Regulating Tax Preparers

ACORN Citizen Wealth Financial Justice

IRSOctatel This may be a case of doing the right thing for the wrong reason, but under any circumstance, it is good news for the the 60% of American taxpayers who pay money to tax preparers for help with their returns:  the IRS finally announced that they are going to require certification and registration for tax preparers!  This could finally be a step in regulating the Wild West of tax prep land, which is fraught with abuse.  It is also likely a sop being thrown to the big mega-preparers like H&R Block, Jackson-Hewitt, and Liberty Tax Services to allow them to bring more order to an industry where even being huge only gives them less than one-third of the market.

Even as the lumbering, passive bureaucracy of the IRS moves towards regulation, they note that CPAs won’t have to register, because they are already licensed, and free tax preparers, like those that once existed at the ACORN Centers when I used to work there, won’t have to have special certifications.  What they did not say, but could have said for the free tax preparers is that to get the IRS filing number for a free VITA center, we already had to get certified!  The article in the Wall Street Journal made it sound like the IRS was being generous, but the facts, as usual, are wildly different, since it’s rather a case essentially of having already forced service centers for the poor to have to be regulated, and finally now having them get around to the rest of the industry!

But, I hate to quibble, because this is a good thing.  The IRS even announced that they are going to reach out to the 10,000 or more preparers who make the most errors.  Hmmmm.  The rest of us make a mistake on our returns and we’re paying interest and penalties and enduring a world of hurt, but if you are a tax preparer the IRS is just finally carrying about the fact that 10,000 maniacs are making huge mistakes?!?  Perhaps a name change is in order and the word “Service” should be dropped from the title, and only Internal Revenue remain?

H&R Block spokespeople greeted the news as manna from heaven.  Why not, this will hurt their competition with the “mom and pops” out there.  It’s no surprise that the former head of HR&Block has been the deputy commissioner of the IRS and would understand this problem exceedingly well.

One way or another though this is good news for working stiffs who have been paying for help no matter the fact that this should have happened many, many years ago.

Maybe the IRS will finally look at doing real outreach now to build citizen wealth through full participation in the Earned Income Tax Credit (EITC).  I hope I’m not getting giddy and carried away?