Wednesday, January 23, 2013


Here are the reactions from fellow tax pros and tax bloggers and interested parties on my idea for a National Institute of Registered Tax Return Preparers, from “tweets” and blog posts:

CPA Joe Kristan started the ball rolling, and proved that brevity is the soul of wit, with his “tweet” –


He did go on to say in his Tuesday “Tax Roundup” at the ROTH AND COMPANY TAX UPDATE BLOG –

Robert D. Flach proposes a voluntary Registered Tax Return Preparer designation.    I have no problem with a voluntary branding, and if Robert and other unenrolled preparers can make a brand of it, more power to them.   I don’t see it happening, though, as it would do nothing for the big franchise preparation companies, who already have their own brands.”

Dan Alban of the Institute for Justice, the attorney who won the recent court case against the IRS, supported the idea in two “tweets”–

Great plan! Best of both worlds: certification for preparers/consumers who value it and lets people choose. 

An excellent constructive proposal from tax veteran @rdftaxpro - voluntary certification offers best of both worlds.”    

A tweet from Kim Kislak –

Good Idea, since there is no way to stop ghost preparers. If the ruling sticks with the IRS, they will need to implement something.”

 Enrolled Agent Jason Dinesen “tweeted” –

I agree with the premise, but there needs to be clear distinction about practice rights of the licensed vs. the unlicensed.”

Jason also posted his “Further Thoughts on Preparer Regulation” at his blog DINESEN TAX TIMES, which included the following comment on the NIRTRP idea -

Robert Flach (aka The Wandering Tax Pro) responded to the ruling by proposing the creation of an independent organization called the ‘National Institute of RTRPs’ that would issue and oversee the RTRP license.

Robert’s idea has a lot of merit. An independent overseer of the RTRP designation would be more likely to be successful than the IRS’s lame attempt. And certainly there needs to be some way to hold the unlicensed accountable, especially in regards to continuing education.”

On the other hand, this "tweet" from CPA Peter J Reilly of FORBES.COM -

I doubt it would be worth the effort to get it going and establish the brand.”

And Russ Fox EA put in his more than 2 cents worth on the issue with “Alphabet Soup” at TAXABLE TALK -

While Robert Flach argues that RTRPs should be resurrected as a voluntary designation, I doubt that will happen (and I don’t see a benefit from it).”

Kelly Phillips Erb, a tax attorney, referenced my post in her interview with Dan Alban at FORBES.COM “Attorney Who Bested IRS In Tax Preparer Regulation Case Speaks Out”.  She promised to read my post after hers was published, saying “I haven’t read the piece yet because I didn’t want it to influence my post”.  I had heard no more from Kelly prior to scheduling the publication of this post.  I will let you know what she has to say in a future post.  

Trish McIntire posted “Voluntary Licensing?” at OUR TAXING TIMES in direct response to my call for comments –

As for the voluntary licensing, which one? It would be nice to think that one of the existing tax preparer organizations will create a definitive program but I can see testing and certification programs popping up all over the place. That could be the downfall of a voluntary program; too many options and criteria. Each program would have its own designation and qualifications. Tax preparers could chose the program they like the best (easiest test, least continuing education, lowest cost). Taxpayers would be confused trying to keep the designations separate.

If I was creating the program, I would have a mandatory test and annual continuing education of at least 15 hours for anyone preparing over 10-15 returns a year. I wouldn’t have grandfathering (sorry Robert) because I’ve seen too many “experienced” preparers make mistakes. If you’re going to have a standard, everyone should have to meet the same standard no matter how long they’ve been in business or how many returns they do a year. Keep it simple.”

First I do not want to call my voluntary RTRP program “licensing”.  The term license implies government involvement and a legal requirement or distinction.  I prefer to refer to it as a “certification program”.

Trish has described the problem of voluntary designations like Certified or Chartered Tax Preparer in the past – each organization offering its own option.  As I explained in my post, the National Institute of RTRPs would only succeed if it were the only voluntary option, and its governing board included all existing tax preparer organizations and, perhaps, a representative of the IRS.

I would, however, insist on “grandfathering” (which would include those who had already passed the IRS RTRP test and been issued the designation, which I failed to mention in my initial post).  And I would recognize those who have already passed a competency test either via an education program or state licensure.  My program would also welcome CPAs and attorneys to have the opportunity to “enroll” and thereby identify their 1040 preparation ability.  It would, obviously, be totally unnecessary for EAs.

Just as a matter of logistics, it would be unwieldy and expensive to have to test a potential 400,000 individuals in a short period of time (as the IRS has discovered).
Thanks to all my fellow tax pros and tax bloggers for sharing their thoughts and insights on the issue.  Further comments are welcome! 

Let me end by saying this.  The last thing I want is the idiots in Congress legislating tax preparer regulation.  They have FU-ed enough things – let’s hope they keep their hands off this issue.


1 comment:

  1. I can see why the court ruled that the IRS can not require the test for preparers, but why can't the IRS say someone is "designated as a registered tax return preparer by the IRS." If I had passed the test that was how I would have been authorized to advertise my expertise, and it would have been nationally recognized. I think they should keep the test and designation and let preparers voluntarily choose to take part or not. Then people can decide for themselves if they want to seek out a RTRP or not.