Archive

ShareThis Page
Crackdown on tax preparers ahead | TribLIVE.com
News

Crackdown on tax preparers ahead

The IRS wants to know who is preparing your taxes and make sure they are qualified to do it.

“You have to have a license to cut somebody’s hair, but you could prepare a tax return … and be sitting in prison,” said Stephen Kirkland of Columbia, S.C., accounting firm Kirkland, Thomas, Watson & Dyches.

In an unprecedented move, the U.S. government next year will begin regulating the tax preparer industry, which has been a breeding ground for fraud, experts said.

Paid tax preparers starting Jan. 1 must begin using an identification number issued by the Internal Revenue Service on all returns, said David Williams, head of the agency’s new Return Preparer Office. The process takes about 15 minutes at irs.gov, and a number is issued instantly, he said.

Some firms outsource work to India or prison inmates, Kirkland said.

“Anybody can do it, whether they have any training or preparation,” he said. “It’s a huge problem.”

Tax fraud hit home last year when the federal government sued a Blythewood, S.C., man and banned him from preparing taxes for others, alleging he filed returns claiming $13 million in fraudulent refunds in 2008.

“Some of these people are fleecing the government for millions of dollars before they get caught,” Kirkland said.

More than 60 percent of taxpayers use a paid preparer, Williams said, and they should look for the identification number before the return is submitted.

If a preparer is not using the number, a taxpayer’s return still will be processed, and a refund will be issued if one is due, Williams said. The IRS will work with the preparer to ensure compliance.

“We do not want to put the burden of this tax compliance on the payer,” Williams said.

The identification number is a first step toward accountability in the previously unregulated industry, Williams said. In coming years, preparers who are not attorneys or accountants, for example, will be required to pass competency tests and undergo continued education annually.

The IRS announced plans for regulation earlier this year, but Williams said the business is seasonal, and many preparers are just now learning about the new rules.

“I’m not a big fan of government regulation,” Kirkland said. But, he said, “I absolutely think there needs to be some regulations on preparers. It will protect the taxpayers and the government.”


TribLIVE commenting policy

You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.

We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.

While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.

We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers

We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.

We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.

We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.

We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.