If you are among the estimated 1.2 million Americans who will be paid to help prepare tax returns for someone else next year, Uncle Sam wants you.
For the first time, the Internal Revenue Service is requiring professional tax preparers to register with the government. In response to recommendations from the Government Accounting Office, IRS officials said Wednesday they also plan to begin testing tax preparers for the 2012 tax season.
David Williams, head of the new IRS Return Preparer Office, said the regulations will help ensure the integrity of the tax returns filed by the 60 percent of Americans who get professional help.
"It's very clear to us that, to the extent we're trying to improve tax administration, we need to work with the tax preparation community and, as the GAO has suggested, provide better oversight," Williams said. "Tax preparers should know that in coming years the IRS is going to take additional steps to make sure the people they select are qualified to do their tax returns and have passed competency exams."
The first step is to require all paid tax preparers to get tax identification numbers that they will enter on returns they are paid to fill out.
Williams said most tax preparers support such registration and testing. He said preparers can register online in 15 minutes.
Major tax preparation firms have endorsed registration, although some object to paying the $64.25 fee for each preparer tax ID.
Martha O'Gorman, chief marketing officer for Liberty Tax Service, said licensing and testing "should help take the unscrupulous people out of the business."
"The only disappointing part of this program from the IRS is the cost," she said. "To take on another $64 or $65 on top of the training required under these new requirements, we felt was a little onerous."
Liberty Tax Service, one of the nation's largest franchised tax services with more than dozen Chattanooga-area offices, began requiring all of its nearly 40,000 tax preparers to complete a course in tax rules three years ago.
California, Oregon, New York and Maryland require tax preparers to be certified, but not Tennessee, Georgia or Alabama.
Williams acknowledged that many tax preparers are likely to pass along the expense to filers.
But a 2006 GAO study found among 19 tax return preparers tested at major chains, only two figured the correct tax liability and all 19 made at least one mistake.
Dan Boone, an IRS spokesman for Tennessee and Alabama, said attorneys, accountants and enrolled agents for the IRS already are tested and licensed. Those who volunteer with the IRS Volunteer Income Tax Assistance program are not required to get a tax ID.
Thousands of VITA volunteers help prepare tax returns for elderly and low-income persons. In Chattanooga, the IRS announced Wednesday it will provide the Urban League $47,000 to help with VITA volunteer training, equipment and facilities for tax assistance next year.