The Congressional Research Service estimates that the current tax gap in the United States is $450 billion dollars. That amount is itemized as follows: $376 million is under-reported liability; $28 billion is non-filing of tax returns; and $46 billion is underpayment of tax liability.
The Congress and the IRS say this is a serious problem. It represents a “non-compliance” rate of about 16%.
The IRS has implemented six strategic actions by which to combat this “shortage”.
The IRS had attempted to regulate ALL return preparers in 2011 with new requirements that all preparers be registered. Registration hinged on passing an exam and taking continuing education courses during the year. But, the federal courts struck down that attempt by the IRS in 2014, thus requiring a change in the law by Congress.
I say all because currently ALL attorneys, CPA’s, and Enrolled Agents ARE registered and do take continuing education.
The thing that stood out when I read these recent reports was that return preparer regulation is a part of an effort to reduce the tax gap. You see, most people would think that return preparer regulation is needed to ensure that the taxpayer/filer gets good advice and submits an accurate tax return to the government.
And that is true…but…that’s not the MAIN reason the IRS wants to regulate ALL tax return preparers.
I find it interesting that with the government there is always a reason behind the reason. That is, whatever the stated reason is for advancing legislation, there is always a REAL reason. And you may think that regulating tax preparers is a good thing. (I would be a CPA with or without their regulatory process.)
But just remember-the real reason is they want more of your money!
We are here to help ensure that you get the best service possible to REDUCE your tax burden-not increase it. Don’t fall prey to the “Tax Gap”.