VSCPA Comments on IRS on Notice 2009-60

August 31, 2009

Richard S. Goldstein
Office of Associate Chief Counsel (Procedure & Administration)
CCPA:LPD:PR (Notice 2009-60) Room 5203
Internal Revenue Service
P.O. Box 7604
Ben Franklin Station
Washington, D.C. 20044

Dear Mr. Goldstein:

The Virginia Society of Certified Public Accountants (VSCPA) welcomes the opportunity to comment on Internal Revenue Service (IRS) Notice 2009-60, Standards of Conduct for the Tax Return Preparer Community and Increased Taxpayer Compliance.

We submit the following comments on behalf of the 8,700 members of the VSCPA and ask the IRS to make final recommendations that address redundant regulation of CPAs and expand existing regulations to include unlicensed tax preparers.

The notice specifically refers to the “Preparer Community,” which includes Certified Public Accountants (CPA), enrolled agents, software providers and other tax preparers. The following comments are provided from the perspective of CPAs who currently have an established framework of licensure and ethical standards of conduct to which they must adhere.

The VSCPA is extremely concerned about redundant regulation and enforcement on CPAs who prepare tax returns. Some of the current requirements for CPAs include, but are not limited to:

  • Regulation by state Boards of Accountancy and requirements to annually maintain CPA licenses.
  • Continuing professional education obligations to meet regulatory and ethics requirements in most jurisdictions.
  • Compliance with regulations and standards set forth by any governmental agency, as required by the American Institute of Certified Public Accountants (AICPA) Code of Professional Conduct and Virginia Accountancy Statute (Section 54.1-4413-3). Therefore, CPAs are already regulated by the Internal Revenue Code (IRC) and related regulations, including Circular 230.
  • Professional standards that CPAs cannot accept any engagement to prepare a return unless they are competent to prepare that return. Acceptance of an engagement in which the individual preparer is not competent would be a violation of all codes of conduct, including Circular 230.

Adding an additional level of registration and regulation would only cause confusion and redundancy. Furthermore, creating a registration requirement for all tax preparers could give the public the impression that all tax preparers possess the same level of expertise and knowledge as CPAs, adding to an already existing misconception that all accountants are CPAs.

As CPAs, we share the concerns of the IRS regarding members of the preparer community who are not currently subject to a framework of licensure or standards of conduct. The large majority of United States taxpayers rely upon the tax preparer community to file their returns and assist with various tax filings.

Rather than adding a separate set of procedures and oversight, we believe that existing IRS procedures and regulations should be expanded to include unlicensed preparers. These existing procedures and regulations should be revised to include the following:

  • Provide a uniform definition of “Tax Preparer”: Confusion currently exists regarding the definition of tax preparer. As the first step in establishing a uniform system, we recommend clarification of the definition of tax preparer and a requirement that all regulations and rulings adhere to this uniform definition. 
  • Use of Preparer Tax Identification Numbers (PTINs): The voluntary PTIN system of identifying preparers was established several years ago so that preparers did not have to use their own Social Security Number on tax returns. Most CPAs who prepare income tax returns are currently using PTINs on a regular basis. We recommend the use of PTINs become mandatory for all tax preparers to advance uniformity and provide the IRS with a consolidated database of preparers.
  • Minimum levels of annual continuing education: As CPAs, we are required to meet certain requirements for continuing professional education. We recommend that similar requirements be imposed for all tax preparers. 
  • Uniform coverage under Circular 230 and IRC Section 7216: These existing frameworks already cover CPAs and other professionals. We recommend that Circular 230 and IRC Section 7216 be expanded to include all tax preparers. For example, Circular 230 applies to attorneys, CPAs, enrolled agents, enrolled actuaries, enrolled retirement plan agents and appraisers practicing before the IRS. It should be expanded to apply to all individuals or entities who prepare tax returns of any type for third parties.
  • Adequate and simultaneous implementation time: For many established tax preparation companies, these recommended changes will require adjustments to their operating procedures and policies. We recommend providing an implementation time of at least 12 months from the date of issuance.

The guiding message underlying our comments and recommendations is to utilize the existing procedures and regulations for tax preparer regulation, and to provide uniformity across the preparer community.

Adding additional regulations will not solve the problems of increasing taxpayer compliance and ensuring that preparers meet both uniform and high ethical standards of conduct. The framework is already in place and just needs to be expanded to cover all tax preparers. Implementation of these recommendations will enable the IRS to have a stronger message to provide American taxpayers guidance in choosing a tax preparer wisely.

Thank you again for the opportunity to provide comments on this very important issue. If you have any questions or concerns, please don’t hesitate to contact me or VSCPA Government Affairs Director Emily Walker at ewalker@vscpa.com or (804) 612-9428.
 
Sincerely,
 
James K. Walker, CPA
Chair, Virginia Society of CPAs

cc: Virginia Board of Accountancy
 American Institute of CPAs
 State CPA Societies

LAST UPDATED 8/31/2009

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