There's been quite a lively debate on the tax blogosphere about whether tax preparers should be regulated. I've been watching it with some interest because it raises a lot of interesting economic and public policy issues.
Peter Pappas, who is an attorney and CPA in Florida and writes The Tax Lawyer's blog, comes down strongly in favor of regulation. Despite some kibbitzing over semantic details, I am fundamentally in agreement with the overall thrust of his argument that anyone who holds himself out to the general public as a paid tax preparer should be subject to regulation.
Peter wondered why any experienced unenrolled tax preparer would not want to take the Enrolled Agent exam.
Since his definition of unenrolled tax preparers includes VITA volunteers such as myself, and since I consider myself "experienced," after four years of supervising and volunteers as a VITA site coordinator, I think that's going more than a bit too far.
The EA test syllabus covers a vast number of topics we'll never deal with at our VITA site, and it leaves out many important topics that VITA sites do deal with every day.
I already take annual VITA certification tests at the Basic, Intermediate, and Advanced Level each and every year on current tax law, which is more relevant preparation for the kind of work I actually do with taxpayers than the Enrolled Agent exam would be. In fact, VITA certification includes options for special certification test on topics and Military Tax issues and Foreign Student tax issues which are relevant at some VITA sites, but don't seem to be covered in the Enrolled Agent test syllabus.
I know my limits as a VITA-certified volunteer preparer, and I recognize when a return falls outside the scope of my Advanced VITA volunteer training and certification, and when I need to tell the taxpayer to consult a tax professional with more appropriate credentials. All VITA volunteers sign contracts with the IRS agreeing to stay within the scope of our certification. We are very clear with our taxpayers about the kinds of returns that we can do, and we explain to taxpayers with complex situations that they need to consult a professional with more advanced training and certification.
The VITA volunteer certification process isn't perfect, but I think it's a better starting point for a model for most garden-variety paid preparers than the Enrolled Agent exam.
Thanks to Peter for provoking my thinking. It seems to me that it's helpful for policymakers to consider the differences between the EA certification process and the VITA certification process as we think about what kinds of minimum regulations to apply broadly to all preparers.