New IRS Filing Season Program for Tax Return Preparers

Courtesy of NAEA, the following link. I bet H&R is really happy.

http://www.irs.gov/uac/Newsroom/New-IRS ... -Preparers

I took and passed the RTRP exam in 2012. I have taken more continuing education than is required since then. I am currently studying for the SEE. I am mightily offended that the IRS has chosen to come up with another Mickey Mouse "qualification" that will be ignored by those who could really benefit.

What really irks me is this: I am from the UK. I spent fourteen years doing taxes there. Now, many Americans have this idea that the UK (and Europe in general) is "Socialist." Yet here we have a legitimate profession that is regulated very heavily by a body that is also an adversary. In the UK, meanwhile, the profession is regulated by the profession itself. Take a look at the organization (http://www.att.org.uk/) that is broadly (very broadly) the equivalent of the RTRP/AFSP. Then someone please explain to me why, as a profession, we put up with this utter crap. Is there anyone from the NAEA or the NATP who would care to explain why they have not taken the lead in developing a proper assessment of one's ability to provide tax services to a public that deserves much better?

I make no apologies for the rant, nor for this next bit. America is afraid of its own shadow. It will be a third world country in thirty years time if it does not start acting like a reasonable, well-educated adult.

I thought the program was 'voluntary'? Here's a link to the story that I read. http://www.accountingtoday.com/news/irs ... A&st=email

To get the certificate, you need:
2 hours ethics
6 hours update (RTRP was 3 hours)
10 hours federal law

Currently, I've been averaging 2 hours ethics and 16 hours of federal law (some update, but not 6 hours).

As long as it's voluntary, and they grandfather RTRP's in, I see no issue for it.

But I do agree with you that the USA is headed to being a third world country in 30 years. If we keep outsourcing jobs, our citizens won't be able to support themselves.

I too passed the RTRP test. The designation is useless. The new designation will be useless. Has anybody ever picked up a new client who 'found' you on an IRS database?

Cathy, it is voluntary but non-compliers will lose their limited representation rights. Will that matter to the incompetents who give the rest of us a bad name? I will probably not be an EA until well into next tax season. Do I now have to tailor my CPE to taking a competency test after six hours of education? I usually attend the NCPE individual tax course (16 hours) and top up with other courses that are of value to me? What are the prospects that courses like NCPE (which are largely aimed at the seasoned professional) either don't come up with the six hour course or, if they do, don't tack it on to the existing two day course. that means I spend time and money duplicating at least half of the course, when that money could have been more efficiently invested in CPE that has real value to me (and, therefore to my clients).

Don't get me wrong. I support preparer regulation. However, I cannot believe they have come up with such a half-baked scheme that serves no-one.

I can't believe that I have even a small amount of anger over this. It must be the last five minutes of the Portugal game and most of last night's that is doing it.

Has anybody ever picked up a new client who 'found' you on an IRS database?

Databases are useful to eliminate a potential preparer.

However, I cannot believe they have come up with such a half-baked scheme that serves no-one.

Come on, a whole industry of would-be CE providers grew up in anticipation of RTRP, plus of course H&R was positioning all its office preparers to become RTRP's. Isn't it clear this whole thing was set up to throw them a bone? AICPA and NAEA objections carried no weight, obviously.

Databases are useful to eliminate a potential preparer.

Frequently, they are not. Countless Circ. 230 preparers are not included in the California CTEC database. If someone goes to CTEC web site to verify a preparer, way at the end of the fine print, it says: "Just as a reminder, an individual preparing taxes for a fee may also be a CPA (http://www.dca.ca.gov/cba), an Enrolled Agent (http://www.irs.gov), or an attorney (http://www.calbar.ca.gov). You may wish to check the websites indicated to be sure the individual in question is not a CPA, EA or attorney, and, therefore, exempt from registering with CTEC. " How many people are either (a) going to read and understand this, or (b) bother to check the other web sites. They're more likely just to go to Yelp or something similar.

Attorneys, EAs, and CPAs don't need to be listed on the CTEC database because they already have a designation behind their name. Unregistered preparers have nothing. Without such designation, and absence from the CTEC list proves they are illegal in California. In my community there are two individuals that hold themselves out to be "professional" tax preparers, yet don't claim to be CPA, EA or attorney, and they are not in the CTEC database. Steer clear. Better of course would be a single database that listed everyone and their designation.

Sum, I know what you're saying, and IMO, anyone who passes one of the SEE exams, should automatically be included in the database.

When they came up with the RTRP designation, as I started completing CEs, to meet the CE requirements, I became a better preparer. I don't think a test will make be better, taking the CE is what is making me better. I hate tests, so I'm glad the RTRP requirement is gone. I believe if I continue taking the CEs as recommended, I stand a good chance of passing SEE without having to study those 'index cards'.

Attorneys, EAs, and CPAs don't need to be listed on the CTEC database because they already have a designation behind their name.

Isn't that what the excerpt from CTEC.org that I pasted said? I don't always use the "EA" designation behind my name, so I don't see what using the designation has to do with anything.

Without such designation, and absence from the CTEC list proves they are illegal in California.

Right, and how many consumers are going to figure that out? Wait, let's back up - how many California consumers even have the slightest idea what CTEC is?

"Better of course would be a single database that listed everyone and their designation."

Well, sure. But do you really think the IRS is going to accomplish that? I've been an ERO for five or six years now, and for reasons unknown, I still do not show up in the IRS on line list of ERO's. That could really be a huge negative business impact, except I doubt anyone bothers to check. Now, if I don't show up in the new IRS listing of blessed tax preparers, who do I sue for lost business?

I just had another new client come in due to a CP2000 received on their 2012 return ('another" means I've had more than 10 this year) that was prepared by an unenrolled preparer. Not for nothing, but in this case the CP2000 picked up a 1099R that the preparer actually DID claim on the return, but claimed it as a Long Term Capital Gain (seriously, folks. I couldn't make this stuff up!).

My point is that these returns invariably share a common trait. Every one I see (including this one) shows the preparer as "Self Prepared". And the client said that the preparer tells them it saves them money to do it that way because if she puts her CPA credentials on the return she would have to charge more. Nice Try!!!!

In my opinion, this "voluntary program" is much ado about nothing. When the IRS had their RTRP, did anyone have a client ask if they were an RTRP, had passed any tests, or even knew what they were doing? I suspect it was less than 1%. If anything, we were asked "Are you a CPA?" They'll give their new program as much press as the last and it will fade into nothing. They've already got their own special certification program (EA) and the general public as never heard of it.
Maybe they should spend some money advertising that instead of making "training films".

I just had another new client come in due to a CP2000 received on their 2012 return ('another" means I've had more than 10 this year) that was prepared by an unenrolled preparer. Not for nothing, but in this case the CP2000 picked up a 1099R that the preparer actually DID claim on the return, but claimed it as a Long Term Capital Gain (seriously, folks. I couldn't make this stuff up!).

My point is that these returns invariably share a common trait. Every one I see (including this one) shows the preparer as "Self Prepared". And the client said that the preparer tells them it saves them money to do it that way because if she puts her CPA credentials on the return she would have to charge more. Nice Try!!!!

The so-called CPA probably used TurboTax.

[The so-called CPA probably used TurboTax.

No probably about it. I just forgot to mention it. Definitely retail Turbo Tax (I have the copy).

Every one I see (including this one) shows the preparer as "Self Prepared"

This is a different class of unenrolled preparer...friend, neighbor, possibly the tp himself blaming an imaginary preparer. I've had to fix these too and I'm an unenrolled/rtrp preparer. We legitimate preparers use professional software and take pride in our work. We put our names on the return. Don't paint all of us with the same brush.

IRS could do a better job by: Publishing return quality statistics by preparer type, policing individual preparers (they have the tax id and ptin info) and increasing the penalties for inaccurate returns to help drive tps to professionals.

policing individual preparers (they have the tax id and ptin info) and increasing the penalties for inaccurate returns to help drive tps to professionals.

You are forgetting that there is nothing meaningful in place to prevent or police PTIN fraud. Increasing the penalties is not the answer, they are already plenty high. It's finding the inaccurate returns in the first place that is the problem.

It's finding the inaccurate returns in the first place that is the problem.

When Joe Taxpayer gets a letter from IRS and his deductions are disallowed or exemptions challenged, he won't be inclined next year to use Bubba's Quik 'n EZ Tax Refund Service. Problem solved.

This is a different class of unenrolled preparer...friend, neighbor, possibly the tp himself blaming an imaginary preparer. I've had to fix these too and I'm an unenrolled/rtrp preparer. We legitimate preparers use professional software and take pride in our work. We put our names on the return. Don't paint all of us with the same brush.

I was not meaning to denigrate your abilities, but then again I wouldn't put you in that category. You have taken the time and effort to get your RTRP designation (regardless of the benefits of doing so), you sign the clients return, you don't put yourself out as being a CPA, and I would assume you stand behind your work. Just the fact that you are willing to join this group means you are willing to learn and handle complicated returns.

Although you are correct that some of these are friends, neighbors, and yes possibly even the tp himself too embarrassed to admit he didn't know as much as he thought, many are just someone who worked a season at HR, or read a book and are able to convince people to pay them to do the return. I've seen many payment receipts from the preparer (at professional rates, I might add!).

By the way, with your background and experience you really should consider getting the EA designation. Bet it would be a snap for you and would then allow representation you cannot currently do.

[The so-called CPA probably used TurboTax.

No probably about it. I just forgot to mention it. Definitely retail Turbo Tax (I have the copy).

Does CA have a mechanism for you to report the preparer? I'm assuming this was illegal under CA law, and often states are better at enforcing such things.