Senate Bill 832 (S. 832) is up for more discussion on Capitol Hill . If the bill becomes a reality, it will lead to regulations, eligibility examinations, and continuing education requirements for paid tax return preparers who are not otherwise regulated. Attorneys, EAs, and CPAs would be exempt from the proposed new guidelines since they are already regulated by existing law.
With notable sponsorship in the Senate, and a strong backing from the Office of the Taxpayer Advocate, S. 832 appears to have more momentum than any bill of its kind in recent years.
This latest legislation has the potential to raise the creditability and professionalism of the commercial tax preparer community. The key word is potential. The new bill is open to interpretation as we anxiously await more details.
As it stands right now, anybody can prepare tax returns without being required to be licensed. CPA's have always been licensed and it is our position that all preparers be licensed.
Here are some highlights of the proposed bill.
S. 832 requires:
- Licensing for all non-regulated paid tax preparers. To receive a license, a tax preparer would have to take a competency exam, ensuring a minimum standard for technical knowledge and professional and ethical responsibility.
- Development and administration of the competency exam by a third party vendor, contracted by the Secretary of the Treasury.
- Mandatory annual registration of tax preparers who offer refund anticipation loan (RAL) products.
- More detailed, exhaustive, disclosure requirements, written and oral, for preparers offering RAL products.
- Penalties for preparers who don’t abide by the guidelines mentioned above, including non-monetary sanctions such as suspension or termination.
- Additional funding for low-income taxpayer assistance programs to provide more return preparation services and assist the un-banked with setting up a bank account to receive their refund as an alternative to a paper check or bank product.
- Public awareness campaigns conducted by the Secretary of the Treasury and using paid advertising to educate the public on making sound fi nancial decisions with respect to refund anticipation loans and to promote the use of licensed preparers for federal tax matters.
Licensing and regulatory changes loom on the horizon. If Senate Bill 832 becomes law, paid tax preparers not currently regulated can expect some new requirements, such as examinations and continuing education, in order to stay in business. For more information, visit http://thomas.loc.gov (Library of Congress website).
We believe this is a good thing and in the best interest of the public.
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