Study Illustrates the Perils of Using an Unlicensed Preparer

WASHINGTON, DC—(September 12, 2008) The National Association of Enrolled Agents (NAEA), the professional society whose members are licensed by the Treasury Department and who work independently to protect the rights of the American taxpayer, commends the Treasury Inspector General for Tax Administration (TIGTA) for its most recent audit. The report underscores one of the major weaknesses of the United States tax system: that there is no meaningful regulation of paid tax return preparers. This lapse results in under-payment of taxes that harms the American public, assaults the integrity of the tax system, and calls into question the reputation of even the most scrupulous professional preparer.

“We are delighted that TIGTA has investigated the use of unlicensed return preparers,” said David Hatt, EA, president of NAEA, “Clearly, it is no longer acceptable that most Americans live in places where their hair stylists are licensed while their tax return preparers are not.

“Fraudulently or incompetently preparing tax returns is not a victimless crime. Law-abiding taxpayers are stuck with the tab, and those who are swindled by unscrupulous preparers are left dealing with the consequences—audit, fines, levying of additional taxes and interest calculated on a monthly basis—while these often fly-by-night amateurs are nowhere to be found.

“Fortunately, enrolled agents can make filing tax returns far less perilous. Their demonstrated competency, fulfillment of continuing education requirements, and federal license makes them the most reliable source for tax advice over the long haul.”

For a copy of the TIGTA audit go to: http://www.treas.gov/tigta/auditreports/2008reports/200840171fr.pdf.