IRS to Institute Regulation of Tax Return Preparers; Enrolled Agents Already Meet or Exceed New Standards

Jan 06, 2010, 14:41 ET from California Society of Enrolled Agents

SACRAMENTO, Calif., Jan. 6 /PRNewswire-USNewswire/ -- The Internal Revenue Service has announced sweeping new recommendations to require all paid tax return preparers to register with the IRS and obtain an individual identification number, pass a background check to ensure their own tax history is in order, pass a competency test, fulfill an annual schedule of ongoing continuing professional education, and adhere to ethical standards promulgated in Treasury Department Circular 230.


Enrolled Agents, attorneys, and CPAs, who are already subject to oversight, will be exempt from most of the new standards, which will be implemented beginning in 2011.

Members of the California Society of Enrolled Agents (CSEA) -- the largest statewide organization of EAs, representing more than 3,700 Enrolled Agents in 19 Chapters across the state -- applaud the new standards, which, according to CSEA President David Shaw of Yuba City, "will equalize the accountability of both credentialed and non-credentialed preparers in America."

"This proposal is a huge step in protecting the taxpayers of America," Shaw advises. "All tax preparers should be required to demonstrate competency and maintain education and ethical standards, but currently only EAs, CPAs, and attorneys are required to do so. This should be a seamless transition for the taxpayers of America and encourage all California Tax Education Council (CTEC) registered tax preparers to join the California Society of Enrolled Agents and take advantage of our resources as they prepare to meet these new standards."

Although more than 1 million tax professionals across America are currently unregistered and unregulated, California is one of the few states that registers tax professionals. Under the proposed regulations, the approximately 42,000 CTEC-registered preparers will have three years to prove their competency by examination and meet the new standards. "During this time of transition, CSEA will work to assist those preparers affected by this proposal, to assist building a skilled community of tax professionals," states Kathy Rocha, EA, of Turlock, Chair of the CSEA Public Information & Awareness Committee.

The IRS proposal includes limiting the scope of practice for individuals who are not EAs, CPAs, or attorneys and the application of disciplinary measures against unscrupulous or incompetent preparers. The IRS intends to also take a deeper look at the role of tax software vendors and the regulation of so-called "refund anticipation loans".

EAs are already required to demonstrate competence specifically in matters of taxation; they advise and represent their clients on all matters of taxation. The Treasury Department requires 72 hours of tax-specific education over a three-year schedule, including 2 hours of ethics training each year; Members of the California Society of Enrolled Agents have an even more stringent ethics requirement (through the National Society of Enrolled Agents) and are required to fulfill 20% more education per year than other EAs.

Taxpayers in California can locate an Enrolled Agent in their area by calling toll-free 800/TAXPRO-5 or online at Outside California, the Enrolled Agent referral number is 800/424-4339.

SOURCE California Society of Enrolled Agents