CPA group questions Senate proposal

An advocacy group for certified public accountants said Tuesday that they took issue with a Senate proposal to give the IRS more power to regulate paid tax preparers. 

The American Institute of CPAs generally praised the broader measure, aimed at battling identity theft and tax fraud, that the Senate Finance Committee will consider on Wednesday.

{mosads}But the group said that it wanted Congress to limit the IRS’s ability to require identification numbers for preparers, and expressed concern that the Senate proposal would cause confusion among taxpayers. 

In a letter to Finance Committee leaders, the CPA advocates floated the idea of not forcing accountants to use the IRS numbers, known as Paid Tax Identification Numbers, in all cases.

The group added that it wanted to “mitigate” any potential confusion among taxpayers over the proposal, and for the IRS to make it clear that it doesn’t endorse any particular kind of tax preparer.

On top of that, the CPA organization says that preparers using the IRS identification numbers should be forced to make it clear that they’re not accountants in any advertisements.

The group liked other provisions in the measure, from Finance Chairman Orrin Hatch (R-Utah) and Sen. Ron Wyden (D-Ore.), including proposals to allow the IRS to require truncated Social Security numbers on tax forms and to require the agency to regularly report to Congress about its efforts to battle identity theft. 

The IRS and government watchdogs have all said that thieves have been using stolen Social Security numbers to claim fake tax refunds at a growing rate in recent years.