The days of sitting down with a shoe box of receipts and filling out a tax return yourself on paper are largely gone.
With millions of Americans turning to paid tax preparers each year, the IRS marked the launch of the 2010 tax season Monday by announcing sweeping changes in how tax preparers conduct their business.
Among the new requirements: tax preparers must register with the IRS, undergo tax competency exams and annual education classes.
"Tax return preparers help Americans with one of their biggest financial transactions each year. It's vital we ensure all tax preparers are ethical," said IRS Commissioner Doug Shulman in a conference call with reporters.
Calling the new requirements a "monumental shift" in IRS tax strategy, Shulman said they're designed to protect consumers, alleviate fraud and bring in more tax revenue.
Of the 140 million tax returns filed each year, the IRS estimates 80 percent were handled by tax preparers or with tax software.
To further thwart fraudulent tax returns, the IRS is mailing letters starting this week to 10,000 tax preparers nationwide who have large volumes of returns dealing with troublesome tax subjects. Those error-prone areas include Schedule A deductions, Schedule C income and expenses, the earned income tax credit and the new first-time homebuyer's tax credit.
IRS agents will also be dropping by thousands of individual offices to check on potential fraud, sometimes posing as taxpayers.
The stricter requirements, the results of a six-month study, will not be in place for the 2010 tax filing season, however. The IRS plans to take a year or so to roll out the new competency exam and licensing requirements.
To read the complete article, visit www.sacbee.com.
Comments