CEDAR RAPIDS, Iowa - As April 15th approaches, millions of Americans have a decision to make. Do their own taxes or pay someone else to do them. But if you plan to pay a tax preparer, how can you tell if that person is qualified or competent?
Certified Public Accountants (CPA), enrolled tax agents and lawyers are automatically qualified to handle tax returns and represent taxpayers. But the Internal Revenue Service (IRS) has attempted to require seasonal tax preparers to pass a competency test and complete 15 hours of ongoing instruction every year. The plan is called the Registered Tax Return Preparers certificate. But that effort is currently on hold as a court ruled earlier this month that the IRS didn't have the authority to impose minimal requirements for those who prepare taxes for others. Right now, the only requirement is tax preparers must obtain an I.D. number from the IRS and use that on the returns they submit.
Some preparation services have their own training rules for those who prepare taxes. Volunteers who do the free tax programs sponsored by United Way or AARP must go through training and pass a test. One H&R Block spokesperson in Cedar Rapids said that company requires new employees to take an 80-hour class and pass a test.
Kim Vine, a CPA with Terry Lockridge & Dunn, said many in the tax preparation business would like to see at least some minimal regulation.
"I hope the government is able to get that regulation in place so that people can know when they go to get taxes done the person has met some minimal competency," Vine said.
Vine added that until the government can set minimal requirements, it's up to consumers to do the research and know more about the people they entrust to do their taxes.
"They can review the credentials of employees, the kind of depth available in the firm the ideas of experience levelsthere's tools available," Vine said.
Vine also had another piece of advice for those letting someone do their taxes. That is look for someone who will be around after April 15th to handle any questions or problems.
A survey by the Pew Research organization last year found 33% of people did their own taxes and 56% depended on someone else, including paid tax preparation services. Eleven percent responded they were unsure who did their taxes.