The IRS has sent letters to tax return preparers whom the IRS has identified as at high risk of not complying with their responsibilities as return preparers. The IRS will follow up with office visits to some of these preparers who appear to have serious compliance issues. The IRS has posted a number of frequently asked questions on the program on its website.
This is the third year the IRS has run a preparer compliance program, and this year’s version represents an expansion and modification of last year’s “10,000 letters” campaign. This year, the IRS plans to send approximately 21,000 letters to preparers, informing them that the IRS has identified serious compliance errors in their tax return preparation. It plans to visit approximately 2,100 of those preparers in their offices.
Unlike prior years, the IRS said the current program takes a more-targeted approach as it focuses on preparers who appear to not be in compliance with their professional responsibilities. In a speech to the AICPA’s National Tax Conference on Nov. 8, IRS Commissioner Doug Shulman said, “the IRS will send letters to tax return preparers who have been identified as ‘high risk.’ The letters are intended to bring to these return preparers’ attention that we’ve noticed some questionable traits on a number of their Schedules A, C or E.”
In addition, the IRS plans to move many of the office visits out of tax season. Last year, the AICPA strongly emphasized to the IRS that CPAs operate their practices on a year-round basis, and the scheduling of any office visits during the very busy months of January through April constitutes an unnecessary hardship.
The AICPA has been actively engaged with the IRS on this issue, challenging various components of the program, and its discussions with the IRS continue.