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Proposed Bill Would Overhaul IRS and Regulate Tax Preparers


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8/30/2018
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Proposed Bill Would Overhaul IRS and Regulate Tax Preparers

Senator Rob Portman (R-Ohio) and Senator Ben Cardin (D-Missouri) have introduced a new bi-partisan bill in the Senate that would overhaul the Internal Revenue Service and give it the authority to regulate income tax return preparers.

The Protecting Taxpayers Act (S.3278), which was read into the Senate record on July 26, 2018, would "amend the Internal Revenue Code of 1986 to provide additional protections to taxpayers." 

“Our tax system is complicated, and the Protecting Taxpayers Act will continue the work of modernizing tax administration so the IRS can operate more efficiently and provide improved service to taxpayers,” said Senator Cardin.  “Americans of all income levels deserve a responsive, effective IRS, and the updates contained in this bipartisan bill will help keep the IRS on that path.”

The bill is currently under consideration by the Senate Finance Committee.  Among other things, it permits the IRS to regulate tax preparers by sanctioning them and removing their Preparer Tax Identification Numbers (“PTINs”).  The bill also allows for regulation of preparer competency, something the IRS previously unsuccessfully tried to implement on its own.  Attorneys, Certified Public Accountants (“CPAs”) and Enrolled Agents (“EAs”) would be exempt.

Some other important features of the Bill include:

  • Creation of an “IRS Management Board” tasked with handling budgeting, technology implementation, training of employees and performance targets/metrics;
  • Revamping IRA and Retirement Plan oversight;
  • Codifying the Voluntary Income Tax Assistance (“VITA”) program for assisting low-income taxpayers;
  • Overhauling the IRS Appeals Process by: (a) requiring the taxpayer to receive their case file prior to an Appeals Hearing; (b) eliminating the ability of Revenue Officers or other IRS personnel to participate in the Appeals Hearing process without taxpayer consent; and (c) creating further additional procedures to make the appellate process more independent; and
  • Establishing procedures for the IRS to accept electronic signatures.

The Association of Independent Certified Public Accountants (“AICPA”) issued a press release supporting the bill, and other tax and accounting organizations have done likewise.

“IRS reform must be predicated on a shift toward a stronger customer-service orientation,” Robert Kerr, EA, executive vice president of the National Association of Enrolled Agents, said in a statement in advance of the Senate hearing on July 25.

The bill complements legislation recently introduced by Senate Finance Committee Chairman Orrin Hatch, R-Ohio, and the ranking Democrat on the committee, Sen. Ron Wyden, D-Ore. (see Senate panel advances IRS commissioner and introduces IRS reform bill).

https://www.cpapracticeadvisor.com/news/12423540/bill-would-allow-irs-to-license-and-regulate-tax-preparers

https://www.aicpa.org/press/pressreleases/2018/proposal-to-regulate-tax-preparers-in-protecting-taxpayers-act-has-aicpas-support.html

https://www.cardin.senate.gov/newsroom/press/release/cardin-portman-introduce-protecting-taxpayers-act-to-make-irs-more-responsive-and-accountable-to-taxpayers

https://www2.ascensus.com/news/industry-regulatory-news/2018/06/04/irs-proposed-regulations-would-require-more-preparers-to-file-returns-electronically/

https://www.accountingtoday.com/news/senators-introduce-bill-to-make-irs-more-responsive-and-accountable



Category: Tax Law


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