The rules the IRS will put in place effective Jan. 1, 2011 has created tension among two major accounting organizations. The National Society of Accountants (NSA) and The American Institute of CPAs (AICPA) disagree on the applicability of new registration provisions for tax preparers.
The AICPA has lobbied the Treasury Department to exempt non-signing tax preparers at CPA firms from the requirements to secure a Preparer Tax Identification Number (PTIN), pass the pending certification exam beginning in 2011 or secure the fifteen hours of CPE training each year. The NSA has written to Treasury Secretary Timothy Geithner and the IRS requesting that these CPA employees not be exempted.
The AICPA has indicated the new IRS requirements are excessive. “Non-signing employees of CPA firms are directly regulated by the states through direct regulation of CPA licenses, as such individuals assume responsibility for the work of their employees,” stated AICPA vice president Edward Karl. Karl made these remarks at an IRS hearing in August. “This builds an incentive for managing CPAs to adequately train and supervise staff contributing to the preparation of a return,” he continued.
NSA president, Donny Woods, has stated, “The NSA does not believe that either of these requests serves the public interest. We oppose any proposed loophole exempting CPA firms and their members or employees from the registration and testing requirements applicable to all other preparers. And, since the testing portion of the proposal is phased in over a period of three years, we find no merit in the request for a delay.”
Woods further explained, “This can vary from state to state and there is currently an ongoing discussion among state boards of accounting about the use of fictitious names by businesses owned and operated by CPAs. Because of this non-uniformity, it is entirely possible that ‘CPA firm’ can be something no one envisions. For example, we are aware that an individual who is a CPA owns and operates more than 40 H&R Block franchises. Would any or all of these separate offices be considered a ‘CPA firm’ for this purpose? Would this be considered one firm?” He further inquired, “Why is it good for consumers or good tax administration policy to provide registration and testing exemptions for one business and not for another business providing the same service?”
Are CPAs simply seeking a competitive advantage other preparers won’t have?
Woods added, “We do not believe the IRS should use its administrative rulemaking capability to provide a competitive advantage for one business at the expense of other business offering the same or similar services.”
Every group and trade organization will be lobbying and seeking advantages for their members. It’s just begun and will be ongoing for at least the next three years these rules are to be implemented.
Tax Wisdom – A democracy cannot exist as a permanent form of government. It can only exist until a majority of voters discover that they can vote themselves largess out of the public treasury.
¬ Alexander Tyler
As Certain As Death
Jeffery L. Yablon