| The Internal Revenue Service wants to set new | | | | preparers is a necessary step in order to increase |
| rules on income tax preparers nationwide. IRS | | | | the protection of taxpayers. Skeptics argue it is |
| Commissioner Doug Shulman issued a proposal on | | | | not tax preparers who are entirely to blame, but |
| January 4, 2010 citing federal regulation will help | | | | the complex tax code that is causing issues and |
| reduce fraud, improve compliance and close the | | | | mistakes. |
| tax gap. | | | | “From CTEC’s standpoint, the reasoning |
| California and Oregon are the only states that | | | | has always been that some education is better |
| have set tax education requirements for its | | | | than no education,” said Celeste Heritage, |
| income tax preparers. In 2009, New York | | | | CTEC administrator. |
| passed legislation to require its tax preparers | | | | Federal regulation of tax preparers has been a |
| register with the state; however, it does not | | | | topic of discussion for at least five years. The |
| enforce education or insurance requirements. | | | | question of how to fund a national tax preparer |
| In California, paid income tax preparers who are | | | | program has been one of the biggest hurdles for |
| not a licensed attorney, certified public accountant | | | | the IRS and even some states that want |
| (CPA) or IRS enrolled agent (EA), are required by | | | | regulation. Maryland passed legislation in 2008 to |
| law to register with the California Tax Education | | | | license its tax preparers; however, the program |
| Council (CTEC). All CTEC-registered tax | | | | has been postponed due to budget constraints. |
| preparers (CRTPs) must complete tax education | | | | Unlike Oregon, New York and Maryland, the |
| courses each year and obtain a surety bond | | | | registration requirement in California is not |
| before they can prepare tax returns for a fee. | | | | managed by the government. The state decided |
| In Oregon, all paid tax preparers must be licensed | | | | to privatize its tax preparer program in 1997 by |
| through the Oregon State Board of Tax | | | | transferring the responsibility from the California |
| Practitioners. Oregon tax preparers have to | | | | Department of Consumers Affairs to CTEC as |
| pass a competency exam before they can | | | | part of a “grand experiment” to save |
| prepare tax returns professionally. | | | | money. |
| “Compliance is a big issue with tax pros,” | | | | Today CTEC is a nonprofit quasi-public benefit |
| said Mary Beth LaMunyon-Jones, CRTP and CTEC | | | | corporation that is run by a board of directors, |
| board member. “Nationwide there are the | | | | three staff members and is funded by CRTPs |
| good ones and the bad ones. There are the | | | | who pay an annual $25 registration fee. CTEC |
| ones who care and the ones who don’t.” | | | | has never once received funding from the state. |
| Proponents of the IRS proposal believe enforcing | | | | 1. “It will be interesting to see how it all plays |
| tax education and professional licenses for tax | | | | out. |