Monday, November 19, 2012


Back in September I wrote a letter to the Carol Campbell, the new Director of the IRS Return Preparer Office regarding my issues with the IRS tax preparer regulation regime – specifically the need for a “grandfather” exemption from the initial competency test for experienced tax professionals like myself and the error in exempting CPAs and attorneys from the testing and CPE requirements.

I posted a copy of this letter here at TTP in “My Letter to Carol Campbell”.

On November 17th I received a letter, dated November 13, 2013, from Preston B Benoit, Deputy Director of the Return Preparer Office in response to my letter to Ms Campbell.  Here is the text of the letter -

“Dear Mr. Flach:

I am responding to your letter dated September 10, 2012.  You requested an exemption from the new testing requirements for federal tax return preparers.  You believe that experienced tax professionals who remain current in tax law should be exempt of “grandfathered” in the Registered Tax Return Preparer designation.

Before finalizing these requirements, we requested extensive input and held a series of public meetings in 2009 soliciting written public documents.  We received over 500 responses to IRS Notice 2009-60.  On August 19, 2010, we published proposed regulations on the competency test and continuing education (CE) requirements.  We received more than 60 written comments on the proposals, including comments from organizations representing a substantial number of tax return preparers.  We also held a hearing on the proposals on October 8, 2010.

After carefully weighing all input, we published final regulations on June 3, 2011, that officially exempted Attorneys, Certified Public Accountants, and Enrolled Agents from the new testing and CE requirements.  We also separately issued guidance exempting certain non-signing supervised preparers and individuals who do not prepare any Form 1040 series returns.

I appreciate your experience and suggestions, but we cannot approve your request for an exemption from the new IRS testing requirements.

If you need further assistance, please call me at (202)927-6428.


Preston B. Benoit
Deputy Director, Return Preparer Office"

If you read my letter you can see that I did not request a specific exemption from the testing requirements for myself.  I was suggesting that ALL experienced preparers like me be exempt from the test under “grandfathering”.

I am well aware of the process that the IRS underwent before issuing its final regulations.  My response, in which I said pretty much the same things I said in my letter to Ms. Campbell, was among the “over 500 responses to IRS Notice 2009-60”.  I believe it is actually published somewhere in an IRS document.

While of no real value, the response at least acknowledges the receipt of my correspondence and indicates that someone, perhaps not the person to whom it was addressed, may have actually read it, although not carefully.  It did not address the reasoning behind the IRS decisions not to grandfather and to exempt CPAs, attorneys, and “supervised employees” from the requirements, or suggest that these decisions might be reviewed.

When I write a letter to a specific person I usually expect a response from that person.  Oh well, at least the response came from the Deputy Director and not some clerk or secretary considerably lower on the ladder.

The need to “grandfather” experienced tax preparers is more important than ever, considering the huge number of “potential RTRPs” who have not yet sat for the test (as I pointed out in my post “There Must Be Grandfathering”).

As of November 5th there are still 314,860 “preparers with provisional PTINs who have not yet passed the RTRP test”.  Since the test was first offered about a year ago only 32,902 have passed the test.  So in the past month only 10,343 preparers have taken and passed the test.

Is the IRS really willing to refuse potentially between 150,000 and 200,000 individuals the ability to continue to make a living in their chosen profession?  Forbidding the taxpaying public access to so many competent and experienced preparers is not good for anyone!

I continue to urge membership organizations like NATP to take up the cause of “grandfathering” and actively campaign for it.  And I urge my fellow tax professionals to write to Ms. Campbell requesting that grandfathering be instituted.

It will be interesting to see who BO appoints as the new Commissioner of the IRS, hopefully in January.


1 comment:

  1. Accounting Today, September 7, 2012: “A high percentage of the industry’s most experienced tax preparers are elderly,” McCabe explained. “Rather than take the exam, many will retire. In addition, tens of thousands of preparers with inadequate tax knowledge who have been enabled to prepare taxes by using tax software would fail the test without additional education. Many of these preparers will quit.”