Tuesday, January 26, 2010
Tax Preparers PCAOB?
"Under the plan, which would begin with the 2011 tax season, anyone who takes money to help people with their taxes will have to register with the IRS, and eventually pass competency tests and sign up for continuing education. So having made tax filing so complicated that most Americans need help with their forms, Washington now wants to raise the price of such counsel by regulating advisers in a way that may reduce their supply. ... Cheering the new regulations are big tax preparers like H&R Block, who are only too happy to see the feds swoop in to put their mom-and-pop seasonal competitors out of business. ... With fewer preparers in the market, H&R Block will find it easier to raise prices. It may also live to regret that. The new IRS blueprint is already in play in California, whose rules for regulating tax preparers seem to have inspired Commissioner Shulman, including his new education and registration requirements. ... Our guess is that the new regulatory scheme will cost far more than it will ever yield in revenues", WSJ Editorial, 7 January 2010, link:
CPAs have had peer reviews, inspections and continuing education for decades. So? H&R Block is the Big 87654 of non-CPA tax preparers. I expect the IRS next will create a PCAOB to drive mom-and-pop shops out of the 1040 preparation business. I doubt H&R Block will get much from this. If it raises its prices too high, its clients will go to CPAs and EAs. Who will make big bucks from this? The CPA reivew firms like: Roger and Becker. They can start drafting their materials now and send them to the IRS to influence the content of the IRS competency exam. The IRS will next have "ethics" requirements requiring bi-annual tests. Roger, Becker, et. al., start your engines. Oh, and don't forget to mail me a very large fee for the idea.