Friday, January 15, 2010

Who should be tested on tax law?

Philadelphia tax attorney Kelly Erb, who blogs as Taxgirl asked:

Are you supportive of the IRS decision to require commercial tax preparers to register, pass a competency exam and be subject to continuing education requirements and ethics rules? Or is it too much of a good thing?

My response:

Tax law has gotten exponentially more complicated with each passing year.

Until such time as Congress vastly simplifies, I would like to see all of the following take a tax certification exam annually:

1) paid preparers of all types (regardless of whether they are EA’s, CPA’s, attorneys or none of the above.) I agree with Kelly that any employee who was materially involved in preparing tax returns should be certified, not just a “signing preparer.”

2) ALL employees of the IRS from the Commissioner on down. [I might have been a little bit too sweeping here. I don't think the custodial staff of the IRS needs to take an annual certification exam, for example, but certainly all high level IRS employees as well as all rank-and-file IRS employees whose job description involves enforcing tax law and/or answering taxpayer questions about it should be annually certified.]

3) The Secretary of the Treasury and any Treasury Department employees whose jobs relate in any way to making tax policy.

4) Anyone on the White House staff whose job relates to tax policy in a significant way.

5) All members of Congress who serve on committees that write tax laws, and their staffs.

The Wandering Tax Pro Robert D Flach thinks it's impractical and unworkable to require annual testing of practitioners.

Well, our tax code is already impractical and unworkable in the first place! Maybe if all the government policymakers have to undergo the annual testing, they'll decide to create a simpler tax code that doesn't require large numbers of "rocket science" paid tax practitioners.

There was a time when most ordinary working Americans could prepare their own income tax returns. Only people with complicated finances needed the help of tax pros. If we returned to those days of simpler tax laws, it would be practical to insist on annual testing of tax pros, because only a small number of tax pros would be needed.

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