News Column

AICPA Voices “Deep Concerns” about Voluntary Program Proposed by IRS To Regulate Tax Return Preparers

May 21, 2014

Recommends IRS Utilize PTIN Data to Track Preparer Performance

WASHINGTON--(BUSINESS WIRE)-- The American Institute of CPAs (AICPA) expressed its opposition today to a voluntary tax return preparer regulation program that the Internal Revenue Service (IRS) is planning in a letter to IRS Commissioner John Koskinen. The IRS was blocked from implementing a mandatory regulation program by court decisions in Loving v. IRS.

The AICPA has “deep concerns with regard to a voluntary system, and the speed with which the IRS is moving to implement such a system,” AICPA President and CEO Barry C. Melancon, CPA, CGMA and Jeffrey A. Porter, CPA, chair of the AICPA Tax Executive Committee, wrote. “We believe a voluntary program would create confusion regarding the relative proficiencies of the various types of preparers. In addition, the proposed voluntary system would undoubtedly leave the impression among most taxpayers that certain tax return preparers are endorsed by the Internal Revenue Service.”

Melancon and Porter called into question the proposal’s likely effectiveness. “As a practical matter, any voluntary regime constructed would still not address the problems with unethical and fraudulent tax return preparers.”

They also criticized the process the IRS is using and how quickly it is proceeding. “We are concerned that the IRS is rapidly moving forward without widely disseminating the proposal or seeking public comments.”

Instead of the proposed voluntary program, the AICPA recommended in the letter that “the IRS should focus its efforts on utilization of the current preparer tax identification number (PTIN) program and increased taxpayer education.” Melancon and Porter noted that the Loving court decisions kept in place mandatory registration of paid tax return preparers and the issuance of unique PTINs, which allows the accumulation of important data on activities of specific tax return preparers as well as classes of preparers in a way that allows the IRS to tailor compliance and education programs in the most efficient manner.

“We urge the IRS to utilize the current PTIN program to track preparer activity, identify patterns of fraud and incompetence across returns prepared by specific individuals, and to institute compliance programs to deal with incompetent or unethical preparers,” they stated. “A voluntary system would not accomplish this goal.”

Furthermore, Melancon and Porter wrote that “we also believe the IRS should administer the penalties and sanctions for which it currently has authority to identify and hold accountable incompetent and unethical return preparers.” They identified six specific penalties in their letter.

A copy of the AICPA letter is available online.

About the AICPA

The American Institute of CPAs (AICPA) is the world’s largest member association representing the accounting profession, with over 394,000 members in 128 countries and a 125-year heritage of serving the public interest. AICPA members represent many areas of practice, including business and industry, public practice, government, education and consulting.

The AICPA sets ethical standards for the profession and U.S. auditing standards for audits of private companies, nonprofit organizations, federal, state and local governments. It develops and grades the Uniform CPA Examination and offers specialty credentials for CPAs who concentrate on personal financial planning; fraud and forensics; business valuation; and information technology. Through a joint venture with the Chartered Institute of Management Accountants (CIMA), it has established the Chartered Global Management Accountant (CGMA) designation to elevate management accounting globally.

The AICPA maintains offices in New York, Washington, DC, Durham, NC, and Ewing, NJ.

Media representatives are invited to visit the AICPA Press Center at


Jay Hyde, 202-434-9266


Shirley Twillman, 202-434-9220

Source: American Institute of CPAs (AICPA)

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Source: Business Wire

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