Wednesday, February 6, 2013

Is getting ugly between some tax preparers and te IRS

For sure in life Death & Taxes
This year 2013 is full of surprises for everybody, and tax preparers are not the exception.  Tax preparers are required by IRS regulation to maintain continuing education and adhere to ethics, the IRS carried out the RTPP or registered tax preparer program, all tax preparers are required to obtain a PTIN or professional tax identification number to be able to transmit electronically to the IRS the tax returns prepared by them.
The IRS has had so many problems with the tax preparations made by unqualified tax preparers, so the IRS stepped in and created the RTPP program a few years ago. Who else would have a higher authority than the IRS itself to regulate tax matters?  Or tax preparers?
Me, living in the golden state of California have it a bit more difficult because California is the only state that requires all tax preparers to have a CTEC number or California tax education council, this number is a license from CTEC for the state of California, in California we are required to pass a test with 60 hours of the federal tax code and 20 hours of the state code. So we in California have a bit more difficult than the rest of the country.
I am the type of person who would  like to get things done quickly  and move into bigger and better projects.
You would suppose that everybody in on board with the IRS and everybody is studying the tax code and getting ready for this test for tax preparers that are required to take place on January  1 , 2014.
We all tax preparers knew that this was coming, and you would have found tax preparers in the nation taking classes and preparing them for this test.
The only way to avoid  this test is by becoming a CPA, a Lawyer or a  IRS Enrolled Agent. I took the Enrolled Agent test preparation back in 2010, and boy let me tell you that test is so hard.
For god sake! I study so much and dedicated myself to pass those three  tests that I got a stroke in the process!!
So, at this point of my life I feel relief that now as a Enrolled Agent I do not have to worry about no more IRS tests and the tax preparers working in my company do not have to worry either because they all work under my supervision.
Well, let me tell you that three  tax preparers somewhere in America decided to sue the IRS and challenge the IRS RTPP program, saying that the IRS has no business in licensing tax preparers. Well, let me tell you that this program is not a licensing program at all. Not even I as a  IRS enrolled agent am allowed to say such thing as licensed by the IRS or working for the IRS because I simply do not work for the IRS, nor licensed by the IRS either.
Build your nest for the future.
To make the story short, in January 18, 2013 a federal judge ruled against the IRS a turned down the IRS RTPP program based on the decision that the IRS was never given the power or authority to provide licenses to tax preparers. Which  I agree. However, the IRS never said anything about providing tax preparation licenses to begin with.
I think this is all a 'OK I do not want to take the tax preparer test and fail, and then what? Do I lose my clients?” It is understandable. I had the same fear when I started to study for my three tests, especially because the first time when I took the test back in February of 2011 I failed, badly.
Of course the IRS had appeal that decision. What the judge said is the IRS should not collect money from tax preparers in order for them to obtain a license.

Some say that the IRS favored large corporate roviders of tax services such as HR Block inc. and Intuit Inc. over smaller independent return preparers, said Dan Alban, an attorney with the institute for justice, a self-described libertarian publicinterest law firm representing the plaintiffs.

My company is far away of becoming a huge corporations like HR Block or Liberty tax, but I agree that tax preparers need rules and regulations just like CPA’s and enrolled agents. Especially now that I pass my three tests and finely became an enrolled agent
What do I think? How do I feel? I am pissed off! All that time and effort put into studying for nothing? And now just because three  tax preparers did not feel like taking that test and won a lawsuit against the IRS.
Some tax preparers vs the IRS.
The IRS decided to appeal that decision, and I feel relief that the IRS took that step, I wish and the IRS wins.  At the end I think the regulations of the IRS will prevail. Who else but the IRS has the authority to regulate any tax career, this is not accounting, and this is the tax law. And who better than the IRS to enforce that every tax preparer complies with the tax law.
The IRS is not the one who takes these tests. The professional company that takes these tests in a test facility is Prometric, which is a specialized test company. This company takes test for all careers, like engineering, architecture, accounting, enrolled agents and tax preparers.
I hope this goes the way it is supposed to be in the very near future