Response to Robert Flach

This started as a comment to The Wandering Tax Pro post;  "Enough Already!"  However, it started to get long and I hadn't posted today, so I moved the venue.

Robert, yes,  there seems to be a double standard for the EAs, CPA,s and attorneys when it comes to the licensing requirements. I think part of the problem is that the IRS wanted to get the program in service ASAP and so it has been making decisions and putting out fires instead of deciding on a goal and creating the rules to meet the rules. I also think that they have caved a little to the different professional organizations. The idea being to get the program going and then plug the holes later. My first suggestion is to plug (end) the whole nonsense of a "supervised" preparer not having to take the test.

One of your commenters pointed out that the CPA exam has a section on Taxation. And I understand the Bar exam does also. My question is how much of those tests deal with the the basics? Not, partnerships, corporations, or tax theory but the practical issues like the determination of the dependency exemption when the circumstances are X, Y and Z or if the taxpayer qualifies for EIC or what special circumstances apply for a MFS client. Because a CPA can correctly calculate the inside and outside basis for a partner does not mean they are up to date on the Form 8332 rules. BUT, those Form 8332 rules will affect so many more tax returns than the basis. That is why I think CPAs and Attorneys should take the competency test; to test their current tax basics knowledge. And that is why I am beginning to think that part of their annual CPEs needs to be specifically tax update CPEs. (On this, EA's too.)

OK,  a change of topic. I don't have a problem with the fingerprinting. It seems to me that it's a good tool to make the background checks quicker and more accurate. You can change your name but not your fingerprints. And I don't understand the reason EAs, CPAs and lawyers are exempt. I did a 10 card for my ERO application so giving the IRS another is not a problem.
However, I don't agree with you on the "grandfathering". I've seen too many returns by preparers with decades of experience that are big time wrong to excuse them from the test. And how could the IRS, or anyone, verify that a preparer meets all your exclusion requirements? And even if I could see some "grandfathering", 5 years is just not enough time. For a seasonal preparer, that is only 15 months of actual experience. But where you draw the line? 5 years isn't enough but is 10 or 20?

Let's face it Robert, we're stuck with these rules and all future variations. And I do expect we will see changes as the program continues. Honestly, I think we are all going to get tired of writing about the licensing issue before everything is finalized.

Comments

[Cindy Galford]

Oh Trish, once again you echo my thoughts, and you do it much more eloquently than I ever could.

[Trish]

Thanks Cindy

[Robert D Flach]

TM-

Thanks for the response!

I can sympathize with your concern about older preparers not necessarily being current. That is why I suggested an accumulated CPE requirement. It is not enough to have been preparing returns for 5 or 10 years – one must also remain current, as evidenced by annual CPE in federal taxation for the past 2 or more years.

The PTIN has been around for several years now, and before that preparers were required to enter their Social Security numbers. So the IRS should be able to verify how long a preparer has been in the business. And I expect most serious preparers would keep an ongoing record of CPE. I have copies of all my CPE certificates for at least the past 10 years.

While I don’t want to give anyone my fingerprints, I suppose I can “grin and bear it” if they are only used one time for the background check and then shredded. My main concern is the exemption of the PITA process for CPAs and attorneys. And specifically, to repeat what I said in my post, if their word alone is good enough for the IRS why is mine not!

Dave Williams had told me that the reason CPAs and attorneys are exempt from most of the regime is “statutory” (he knows that the CPA and Bar exam are not tests of 1040 knowledge) – but I could not find any law prohibiting them from testing and specific required CPE.

I do agree we will soon grow tired of posting about this topic.

RDF

[trishmc]

Robert
one must also remain current, as evidenced by annual CPE in
federal taxation for the past 2 or more years
I would want this more specific, I would want proof of annual tax
updates and not just Federal taxation being part of those CPE. I
just ordered my ethics CPE for this year and I could have fullfilled
my CPE requirement for 4 years from that catalog and never take a
course covering the changes and court ruling for any year.
T