Fuller Insights
Biden’s new tax proposal aims to regulate all paid US tax return preparers
Fuller Landau welcomes President Biden’s tax proposal to vest Internal Revenue Service (IRS) with authority to regulate all paid preparers of US tax returns and establish mandatory minimum competency standards. IRS’ current authority extends only to licensed attorneys, certified public accountants (CPA), enrolled agents (EA) and actuaries. Attorneys, CPAs and actuaries are also subject to regulation at the state level. Paid preparers who are not attorneys, CPAs, EAs or actuaries are essentially unlicensed and unregulated.
Paid preparers must obtain a preparer tax identification number (PTIN) from IRS and sign the tax returns they prepare. Some paid “ghost preparers” ignore the PTIN requirement and prepare returns for a fee without signing the return. The Biden proposal would increase the penalty on ghost preparers from $50 per return and $25,000 per preparer per year to the greater of $500 per return or 100% of the fee charged per return. It also would double the period of limitation to assess penalties to six years.
Even with these additional regulation, US taxpayers are wise to select return preparers based on qualifications, licensure, and relevant experience. Led by partners Jeffrey Brown (CPA Massachusetts, 30+ years experience) and Holly Haber (CPA New York, 20+ years experience), Fuller Landau’s US Tax team includes licensed CPAs who trained with Big Four and other US-based accounting firms.