IRS to start regulating paid tax preparers

WASHINGTON The Internal Revenue Service plans to start regulating paid tax preparers, requiring them to register with the government, pass competency tests and adhere to ethical standards.

The new regulations, announced Monday, will not be in effect for the current filing season, which ends with individual tax returns due April 15. But IRS Commissioner Doug Shulman said tax preparers will be held to higher standards in future years as the IRS steps up its oversight to help reduce fraud and errors.

The new regulations “will help ensure that taxpayers receive competent, ethical service from qualified professionals and strengthen the integrity of the nation’s tax system,” he said.

Shulman said he hopes to have all paid tax preparers registered by the 2011 filing season. Preparers will be given about three years to meet competency requirements.

More than 80 percent of taxpayers use a paid tax preparer or tax software to complete their yearly returns. However, paid tax preparers are unregulated in many states, unless they are also lawyers, certified public accountants or enrolled agents who represent taxpayers in front of the IRS.
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