IRS May License Tax Preparers to Help Close ‘Tax Gap’
By Ryan J. Donmoyer, Bloomberg.com
The Internal Revenue Service is considering registering or licensing paid tax preparers such as H&R Block Inc. and Jackson Hewitt Tax Service Inc. as part of a broad review of the way Americans file tax returns, Commissioner Doug Shulman said.
Shulman told a House Ways and Means subcommittee today he is preparing a “comprehensive set of recommendations” that may include new regulations for preparers to help recover an estimated $290 billion in uncollected taxes. He later told reporters that may include a registration or licensing requirement.
Requiring paid tax preparers to register or become licensed would establish a national accreditation framework for the industry for the first time, with the goal of improving accuracy of tax filings and ending fraud that investigators say fleeces both taxpayers and the government.
“This is nothing less than a transformational shift,” Shulman said.
Sixty-one percent of individual tax returns are done by paid preparers, according to IRS Taxpayer Advocate Nina Olson, the chief ombudsman for U.S. taxpayers, who has recommended licensing of preparers since 2002.
“Untrained and unscrupulous preparers present a serious problem,” Olson wrote in a 2006 report to Congress.
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