2008 session preview
Once again, unlicensed tax preparers is an issue Minnesota CPAs
must advance. In recent years, Minnesota has seen some
unlicensed tax preparers wreak havoc on individuals' financial and tax
situations. CPAs must respond to the present
situation and ask for strict licensing requirements for tax
preparers. This action will ensure the safety of everyone's
financial future.
The issue
There have been high profile media
stories in recent years about unlicensed tax preparers who have
taken advantage of unsuspecting clients by filing incomplete and
substandard returns.
The media's interest in this issue
stemmed from several highly publicized cases
of tax preparer fraud in relation to the earned income credit.
A handful of
unregistered and unlicensed preparers
who were intentionally doctoring income tax returns in order to get a bigger return for their clients. Because they took
a percentage of the refund, they also got more money for
themselves.
Why should you care?
CPAs understand the importance and the
investment behind the CPA designation. Tax preparers should adhere
to similar requirements if they would like to be tax preparers.
Without some kind of licensing, we are doing nothing to stop those
preparing the fraudulent tax returns. Because CPAs serve the
public, it is our responsibility to protect the group we serve.
MNCPA action
In response to this growing
concern, the MNCPA government relations
team put together a task force to explore ways to combat the
problem. The task force is chaired by MNCPA member Ruth
Ann Michnay, and is made up of several members that work
specifically in the individual tax arena.
The task force met several
times, came up with some proposals, and then
met with Rep. Thissen and representatives from the Minnesota
Department of Revenue to discuss
them.
All parties contributed ideas. Eventually, language was worked out
that was acceptable to all. The
legislation that was introduced:
-
Increasing the fine for preparers who file fraudulent returns to $1,000 per
return,
-
Authorized the DOR to publish a
list of preparers fined for submitting fraudulent
returns (similar to delinquent concept), and
-
Authorized the
Board of Accountancy and the DOR to share information concerning
complaints they receive about non-CPAs.
In 2005, there were attempts to pass additional regulations for
unlicensed preparers and to provide the Minnesota Department of
Revenue more enforcement tools to
pursue unlicensed tax preparers who take advantage of taxpayers.
These actions included a fine increase for the preparer of the
fraudulent return.
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