More on regulating tax return preparers

I posted a few days ago about a good number of recent developments in the IRS program to regulate paid tax return preparers (6/10/11). Since then, a few more developments:

• The IRS Return Preparer Office launched a Facebook site - here.
• Email was sent to some number of preparers today asking them to take about 30 minutes to complete a survey by June 22. "The purpose of this job analysis study is to identify the tasks performed by tax return preparers and the knowledge/skills required to perform these tasks. The results of the study will be used by Prometric to create Test Specifications for the return preparer examination."

The survey sounds like a good way to gain a sense of what a return preparer should know and have access to. Questions include what research tools and authorities are used, what software tools are used, the importance of a variety knowing a variety of rules and forms to calculate taxable income and tax liability.

The exam would be way too long and probably no one would pass it closed book and closed to accessing a commercial tax research tool/database such as RIA Checkpoint. So, should the exams just test very basic items such as filing status, personal and dependency exemptions, asset basis and transfers, Schedule C items, reporting information from pass-through entities, passive activity loss limitations? Which credits?

Or, should it provide takers with access to the Internal Revenue Code, regulations, IRS rulings and court cases (in a searchable database) and ask a range of questions to see what they know and how they do researching the law? I'd suggest the later as that is the key skill needed today. Taxpayers at all levels of income can have a variety of complex matters.

Also, the IRS program is focused on preparing returns. Today, people using a preparer likely are not spending their own time figuring out if they are able to use or should be using a variety of rules that exist for planning purposes, such as the numerous provisions for higher education and retirement plan savings. How much should preparers know about this aspect of the tax law?

Did you take the survey? If yes, your reaction? Other comments?