My comments letter follows:
Comments per Notice 2011-48
Registered Tax Return Preparer Competency Examination
Annette Nellen, CPA, Esq.
San José State University
July 7, 2011
"Tax return preparers are expected to be knowledgeable in tax law and to prepare accurate returns. As a tax return preparer, you must take all necessary steps to prepare accurate Federal tax returns on behalf of your clients. These steps include reviewing the applicable tax law to ensure all income has been reported on the return, and only credits, expenses and deductions allowed under the Internal Revenue Code are taken. Tax return preparers are required to exercise due diligence in preparing or assisting in the preparation of tax returns and claims for refunds. As a general rule of thumb, that means knowing the underlying substantive law affecting an item of income or deduction."
- Asking what resources the person has available to find answers to questions about how particular amounts and transactions should be reported on an individual client's income tax return.
- Questions based on reading a Code section and related regulations provided as part of the examination.
- Due diligence questions such as providing a possible client fact pattern and asking what questions they should ask of the client.
- Due diligence questions about appropriate preparation and review procedures for a tax return.
In addition to multiple choice questions, there should be a few short answer questions to address some of the questions noted above.
Consideration should be given to reviewing the test design, administration and questions that are used in states, such as Oregon, that already require certain preparers to pass a competency exam.
These comments are submitted by Annette Nellen and not on behalf of her employer or any professional organization of which she is a member.
Contact Information: firstname.lastname@example.org (408) 924-3508
[fn 1] A list of articles can be found at http://www.21stcenturytaxation.com/Federal.html#Compliance.
--What do you think should be on the exam (and not on the exam)?