Tuesday, May 29, 2012


I have said it many times before, and will continue to say it many times again – requiring registered tax professionals to sit through 2 hours of “ethics” preaching each and every year in order to maintain their PTIN is a waste of time.

If I am a crooked tax preparer sitting through 2 hours of ethics preaching ain’t going to turn me honest!

At most there should be a requirement of perhaps 2 hours in the first year a person registers and receives a PTIN, and 1 hour of updates every other year (with the first year specifically identified – so that “every other year” is the same for all registered tax pros).

I do not have a continuing education budget.  If a topic, or the combination of topic and location, interests me I will attend the conference, workshop or seminar.  However many small firms, as well as firms with multiple employees, do have a continuing education budget.  Because the IRS requires 15 hours per year, the budget is 15 hours per year per employee.

For a firm with a continuing education budget of 15 hours per person, forcing everyone to take 2 hours of ethics every year cuts down on the actual continuing tax education available to a tax preparer.  The 2 hours could be better spent learning more about a specific area of the Tax Code with which the preparer is unfamiliar or unsure, or reinforcing and updating knowledge about an area that is common among the firm’s clients, or upgrading one's knowledge to partnership or corporate return preparation issues.

Another side detriment to the 2-hour annual requirement is that almost every 1 or 2-day seminar or workshop, regardless of the main purpose or topic(s) of the event, includes 2-hours of ethics.  I have been told by some education providers that they must include the 2-hours in order to maintain a profitable level of attendance.  So, as is true in my case, a tax pro is often forced to sit through 4 or even 6 hours of ethics preaching in a year – a total waste of time and money! 

The ultimate loser is, of course, the taxpayer client.    


1 comment:

  1. What are the ethic requirements that will be taught?

    I think making sure preparers are "honest" isn't the point at all - for CPAs in Oregon, the ethics classes are about teaching the very specific rules of the AICPA ethics requirements (another issue altogether - rule based instead of principle based). Even if you're trying to be honest and using common sense to stay out of unethical situations, to avoid getting in trouble with the Board of Accountancy you have to be aware of which relatives count as impairing your independence, in what situations you're allowed to charge a contingent fee, what entity forms and names are allowed for a CPA firm, etc. And those are things that do need to be refreshed once in a while. (We're required to take 4 credits every two-year renewal period.)