Tax preparers by the numbers:
Number of 2008 tax returns prepared by paid preparers:
~ 80 million
Number of paid preparers based on IRS database of paid preparers who signed at least one 2008 tax return
~ 1.1 million
US Treasury Department's "best guess" about number of paid preparers in 2008
~ half a million
The first step in regulating commercial tax preparers is to count them up.
Last week, the government released a report confessing that it isn't exactly sure how many preparers there are, even though all paid preparers are required to provide information about themselves on each return they prepare.
The new Treasury Inspector General for Tax Administration (TIGTA) study released last week suggests that the IRS records are seriously confused, due to inconsistent and/or incorrect and/or invalid identification information provided by preparers.
If TIGTA is right, that means that there are about half a million paid preparers. But the IRS records seem to be seriously confused, due to the plethora of different numbers that preparers use--some use their SSN, some use the Employer Identification Number(EIN) of the tax prep business they work for, some use a Prepaper Tax Identification Number (PTIN), and some use a combination of the above. According to TIGTA, the IRS has 22 different databases where it keeps track of these numbers, so it's not really easy for them to check out who's who.
One thing is clear: TIGTA and the IRS believe that the overwhelming majority of paid tax preparers are "unenrolled," meaning that they have not demonstrated their competence to any government regulatory body.