In an announcement that may sound little worrisome for the paid tax preparers in the US, the US Internal Revenue Service (IRS) on Monday revealed its new plans for the tax preparation industry. As per the announcement the IRS will require registration and competency exams for legions of tax return preparers that now largely escape regulation. However, the tax preparers have their share of luck too as the IRS has clarified that the changes will take time to be in place and will not be applicable in the 2010 filing season.
The IRS is planning to implement these changes based on its study of the industry and requests from tax payer’s rights organizations for stronger oversight. Under existing law, anyone can prepare a return with absolutely no standards.
With the new rules coming in to play all paid tax payers will have to register themselves with the IRS and obtain an identification number. They have to include these identification numbers in every return they prepare. The paid tax preparers will also have to meet continuing education requirements in addition to passing a competency test.
However, attorneys, certified public accountants and enrolled agents are excluded from this planned regime as they will remain subject to the requirements of their respective licensing bodies.
Validating the move IRS Commissioner Doug Shulman said in a press statement, “The decisions announced today represent a monumental shift in the way the IRS will oversee tax preparers.” He further added, “Our proposals will help ensure taxpayers receive competent, ethical service from qualified professionals and strengthen the integrity of the nation’s tax system.”
With more than 80 percent of the US taxpayers preparing their tax returns with help of such paid preparers or various software, the new rules are not only aim at boosting standards within the fragmented industry, but also expects an increase in revenue to the government.