VSCPA Issues Statement on Virginia HB 1159 Relating to Electronic Filing Requirements for Tax Preparers

The Virginia Society of Certified Public Accountants (VSCPA) is a membership organization of 8,000 Virginia CPAs, with approximately 3,800 members who are involved in the taxation area.

House bill 1159 is designed to require all tax preparers who file 100 or more returns to do so electronically through the Virginia Department of Taxation's (TAX) E-File program.

Fundamentally, the VSCPA opposes the proposal on the following points:

TAX's electronic filing system is unreliable. Faults in the current system have resulted in erroneous delinquency notices being sent to taxpayers causing anxiety and diminished faith in their tax preparers by no fault of their own. This unpredictable system is not prepared for mandatory compliance.

The measure proposes an overly burdensome penalty be assessed on all returns filed outside the E-file system. A suggested solution is to offer incentives for utilizing the program. The Internal Revenue Service, running a similar electronic filing system, provides several incentives that promote and grow the program rather than forcing compliance through punitive measures. Penalizing preparers inappropriately shifts the burden of tax compliance from TAX to citizen tax preparers.

Many practitioners prepare tax returns without the use of computers. H.B. 1159 would require them to undergo a lengthy hardship waiver process they may be unaware of. This measure, if successful, may cause many practitioners to undergo a costly period to become computer literate and equip their business with appropriate technology. In the worst example of the inflexibility of this legislation, it may drive many practitioners out of business.

The VSCPA understands that technology will change with time, and that every profession must adapt to remain in the marketplace. This legislation requires abrupt and marked changes without time for taxation professionals to adapt and comply.

For these reasons, the VSCPA opposes HB 1159, and respectfully asks the Virginia General Assembly to remove this measure from its agenda.

Questions and concerns may be directed to VSCPA Government Affairs Director Erin Collins at advocacy@vscpa.com or (800) 733-8272. The VSCPA's legislative counsels are Ralph L. "Bill" Axselle Jr., (804) 783-6405, and Bernie McNamee, (804) 783-6493 of Williams Mullen.

LAST UPDATED 1/1/2004

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