Tag: Doug Shulman

The IRS Is Making “Thousands” of Visits to CPAs During Tax Season

Apparently the IRS is not one for timing. Earlier this month the Service announced that if you get paid to crank out 1040s, your life as you know it is more or less over. Well, at least a little more inconvenient. Okay, it’s hella-inconvenient.

Back when the new regulations were announced the Service let it be known that since it can’t get these new regulations implemented for 2010, it was still stepping up its efforts for getting all up in tax preparers’ shit.


The first step being to be to send 10,000 letters to paid preparers nationwide letting them know that they need to be on their A-game. The letters were intended for, “preparers…with large volumes of specific tax returns where the IRS typically sees frequent errors,” and that they should be “vigilant” for errors related to “Schedule C income and expenses, Schedule A deductions, the Earned Income Tax Credit and the First Time Homebuyer Credit.”

Well then. That should cover about EVERY TAX PREPARER IN THE COUNTRY.

Anyway, the IRS is following up the 10,000 “Dear Joe Kristan” letters with phone calls to set up sit-downs with “thousands” of preparers. According to William Stromsem, who wrote a piece over at CPA2Biz, these are “urgent” calls:

In at least one case, the IRS called a practitioner at home and spoke with the spouse by name, asking for a response within three hours and then calling back before that time was up. Another practitioner, who was unable to schedule a meeting during a busy time was threatened with having the refusal passed up the line to a supervisor.

The piece goes to tell us that the visits will be performed in the coming weeks and months and may last up to 3 hours. Does anyone see a problem with this yet?

These chats are designed to be friendly reminders of all the pitfalls out there in tax preparer land; not a compliance visit (but they will remind you of the penalties that can be assessed for any malfeasance). Regardless of the pleasant intentions, the timing has irked CPAs to no end and we can’t say that we blame them. Hope no one is expecting an apology. And one more thing, we’d like to know how the Commish’s CPA feels about this whole thing. Just for fun; he should get a letter.

IRS ‘10,000 Letters’ Program Angers CPAs [CPA2Biz]

You Don’t Like the Way I Prepared Your Return? Take Two Tylenol and Call Me in the Morning.

TYLENOL325.jpgEditor’s note: Joe Kristan is a tax shareholder for Roth & Company, a Des Moines, Iowa CPA firm, where he works with closely-held businesses and their owners. Prior to helping start Roth & Company, he worked for two of what are now the Final Four CPA firms. He writes the Tax Update Blog and is available for seminars, first communions, Bar Mitzvahs, etc. You can see his previous posts for GC here.
While the IRS is cracking down on tax preparers and proposing new rules to herd them into submission compliance, problem preparers aren’t a new problem.
Back in 1982, when the 1986 Code was just a gleam in Dan Rostenkowski’s eye, the nation’s headaches went untreated when people started dying from cyanide-tainted Tylenol. We still live with the hard-to-open containers for almost everything as a legacy of the murder spree. The killer has never been nabbed, but the tax world has supplied one suspect. The Chicago Tribune reports:

James William Lewis, a longtime suspect in the 1982 Tylenol murders, made a rare public appearance on public access television near Boston on Sunday night, hoping to promote his new self-published novel, “Poison! The Doctor’s Dilemma.”


Instead, Lewis was met with a barrage of questions from the show’s host and callers about whether he had a role in the unsolved cyanide poisonings that left seven Chicago-area residents dead, and if his novel had anything to do with the killings.

Why the suspicion?

Lewis said during the 48-minute interview that he regretted having written Tylenol’s manufacturer after the deaths, demanding $1 million to “stop the killing,” for which he was convicted of extortion.

A mistake anybody could make, especially after things have gone bad in your tax practice:

After his extortion conviction in 1983, Lewis served more than 12 years in prison. In the 1970s, Lewis was accused in Kansas City, Mo., of killing and dismembering a client of his tax-preparation business. Charges were dropped after a judge threw out most of the evidence.

That just shows how the new preparer regulations are long overdue. We can be confident that IRS Commissioner Shulman’s new preparer registration and CPE requirements — especially the two annual “ethics” hours — will keep anything like that from ever happening to a preparer today.

IRS Commish Finds the Tax Code Complex, Doesn’t Do His Own Taxes

[caption id="attachment_23858" align="alignright" width="260" caption="Dude. Code is this thick."][/caption]Just because you’re in charge of the IRS doesn’t mean you know anything everything. Doug Shulman was on C-SPAN over the weekend (we’re sure you saw it) and admitted that he uses a tax preparer.

His rationale is, “Look, I’m a busy dude, I don’t have time to do my own taxes. Besides, have you seen the size of the tax code? It’s a flippin’ mind job.”

Or in his own words:

“I’ve used one for years. I find it convenient. I find the tax code complex so I use a preparer,” Shulman said.
Pressed on how he would make the tax code simpler, Shulman responded, “I don’t write the tax laws. Congress writes the tax laws so that’s a whole different discussion.”

Unapologetic as usual, Dougie. We’ll give him credit though – admitting that the tax code that you’re in charge of enforcing is too complex is admirable (although not a news flash).

Plus, he goes so far to say that he’s powerless to do anything about it. Now that’s transparent government!

IRS commissioner doesn’t file his own taxes [The Hill]

H&R Block Is Up for the Challenge

Thumbnail image for GOVT.jpgAfter yesterday’s news of brand spanking new requirements for paid tax preparers, we mused about the plans of tax prep shops like H&R Block to fall in line with Doug Shulman’s demands.
It was then suggested to us that maybe we should just ask them. Novel idea! So being nosy we did just that.
We got in touch with very helpful H&R Block spokesperson who provided us with the following statement:

H&R Block is pleased to support IRS Commissioner Shulman’s efforts to improve the regulation of tax preparers. We believe the requirements announced by the IRS today are a great first step in delivering on the promise of providing all taxpayers an ethical and accurate tax preparation experience.
We welcome the spotlight that the IRS has cast on our industry and are committed to maintaining the highest possible training and testing standards in the tax preparation industry. H&R Block tax professionals already are required to complete hundreds of hours of training and undergo additional testing each year. Our minimum training standards exceed those the IRS will require.

So there you have it. Challenge accepted. In fact, H&RB will see your IRS standards and raise you. See you in 2011.

IRS Sticks It to Amateur Tax Preparers

Thumbnail image for shulman.jpgAny tax preparers out there that got their stripes by virtue of an 8 hour course in the basement of a church will have to start hitting the books. Today, the IRS announced that it is putting a stop to all the amateur 1040 jockeys out there by issuing new requirements for all paid tax preparers.

The new requirements came after complaints from taxpayer rights’ groups who wanted stronger oversight over the industry. Apparently there are too many “tax professionals” that can’t tell the difference between a W-2 and a sack of doorknobs.

WSJ:

[S]tarting in 2011, all paid tax preparers will have to register with the IRS and include a unique identification number on any returns they prepare. Preparers will be given three years to pass a competency exam in either individual or small business taxation.

Attorneys, certified public accountants and enrolled agents will not be required to pass the competency tests. They will remain subject to the requirements of their respective licensing bodies.

But the exams and new annual, continuing education requirements will impact likely hundreds of thousands of preparers, from employees of chain preparation firms like H&R Block Inc. and Jackson Hewitt Tax Service Inc. to mom-and-pop storefronts that offer tax preparation as one of several services.

Three years to pass an exam? Even the dimmest of CPA Exam candidates manage to finish in 18 months. Also, we’re curious as to what diabolical plot the H&R Blocks and Jackson Hewitts of the world will devise in order to speed their professionals into compliance.

Regardless of the shortfalls, Doug “Don’t expect me to apologize” Shulman said that the new requirements were ‘long overdue’. He also said that the Service will be forming a task force to look into determining the accuracy of tax prep software for possible future standards over that industry.

One thing is for sure, somewhere Doug’s boss is asking his friends if they know any good CPAs.

IRS to Boost Oversight of Paid Tax Preparers [WSJ]