Archive for February 2010

IRS Oversight Board Finds Support for Return Preparer Regulation

February 18, 2010

Most taxpayers surveyed by the Internal Revenue Service Oversight Board said they believe return preparers should be regulated and should meet competency and ethical standards, the organization said in releasing its 2009 Taxpayer Attitude Survey.

Among a broad range of other topics, the survey also found that the fear of auditing has a greater influence than ever before in the poll’s seven-year history, and that there has been a reduction from 2008 levels in the importance of and tendency to use taxpayer assistance services.

On the return preparer issue, the document indicated that “a vast majority of taxpayers” are likely to applaud a major change by IRS last month to regulate tax preparers, the board said in a news release showing the survey.

Nearly 80 Percent Support Regulation

Seventy-eight percent of those surveyed indicated that it is “very important” that return preparers meet standards of “ethical behavior,” while 73 percent said they believe it is very important that tax preparers meet competency standards.

The board said this continues a trend of overwhelming support in the past two years for requirements that tax preparers meet competency and ethical standards in order to enter the business.

“Requiring tax preparers to register and verify their competency may be one of the most important steps the IRS has made in the tax system in our lifetimes,” said IRS Oversight Board Chairman Paul Cherecwich. “A tax return prepared improperly or fraudulently can have negative ramifications for years for an unsuspecting taxpayer—and it’s clear from the Board’s survey that Americans know that.”

68% of S Corp Tax Returns Have Errors

February 4, 2010

According to IRS data, about 68% of S corporation returns filed for tax years 2003 and 2004 (the years data were available) misreported at least one item. About 80% of the time, misreporting provided a tax advantage to the corporation and/or shareholder. The most frequent errors involved deducting ineligible expenses, which could decrease S corporation shareholder tax liabilities. www.vieracpa.com