Taxpayer Bill Of Rights

Congress is having another go at the licensing of tax preparers. This time they have included it  in HR 5716 - Taxpayer Bill Of Rights Act 2008. Bills including provisions for the licensing of preparers has been around for at least 5 years. They tend to die when the session of Congress ends. This one may suffer the same fate but it does have one provision I haven't seen for a while; a public awareness campaign.

To be fair, licensing will not affect me. I am already covered by Circular 230 since I am an Enrolled Agent. But I am tired of seeing bad returns and hearing stories of what other "tax preparers" have allowed or done.

• Allowing, through on office in home deduction, an employee to take all the utilities and insurance of his home.
• Taking commuting mileage on form 2106.
• Telling a taxpayer who cleans houses she doesn't have to report the income. The return also had the husband's commuting miles taken against a side business. Part of that income was on his Schedule C but the rest was on the other income line of the return. And there was no paid preparer info on the client's copy of the return.
• Taking the money and not e-filing the return as promised.
• Not returning the taxpayer's information to them. Or not giving them a full copy of their return.

I don't know how much abuse will be stopped by licensing just by itself. I would hope it will get rid of most of the pawnshop and car lot preparers. But after this season, I am concerned about good people who pay someone to do their taxes and don't get a complete and accurate return. Even the best preparer will make a mistake. Our tax code is to convoluted for that not to happen. But too many preparers are getting by with fraud because there is no way to hold them accountable when problems arise. In some cases, it is as simple as  they don't fill in the paid preparer info. They get by because most taxpayers don't know that that area has to be filled out or that it not being completed could signal a problem.
If you are going to the trouble of licensing tax preparers, then let the taxpayers in on the standards so that they can protect themselves.