I've been intrigued by a few aspects of the new IRS system to regulate all paid return preparers. In particular, what types of questions are they going to ask of preparers who are not CPAs, attorneys or Enrolled Agents (that is, they are not exempt from testing)? It would seem that the tests should be shorter and/or simpler than the tests (otherwise, why not make everyone become an EA)?
In the famous "10,000 letters" campaign the IRS started in the 2010 filing season - where they mail letters to some preparers reminding them of how to fulfil their preparer obligations and let them know they may get a visit from the IRS, the IRS says preparers should know substantive law. Yet, in describing the tests they just give the form numbers to be covered. So, do they expect that all preparers have access to the Internal Revenue Code and other primary authority and how to use it? Or is use of IRS publications and form instructions sufficient?
I've got a short article on this topic in the 3/10/11 AICPA Tax Insider - here. I hope you take a look and post here your ideas about the testing. Here a few of the questions I suggest they ask:
- How did you prepare to become a tax-return preparer?
- How do you find answers to tax questions?
- How do you access substantive law?
- What tax-preparation software do you use? If none, explain why.
- What is the review process for the returns you prepare?
What do you think?