Congress Urged To Enact Minimum Standards For Tax Return Preparers At Senate Finance Committee Hearing
This morning, H&R Block President and CEO William Cobb testified at the Senate Finance Committee hearing on “Protecting Taxpayers from Incompetent and Unethical Return Preparers”.
Cobb’s remarks focused on the need to better protect consumers and help reduce fraud. He outlined two key priorities as part of H&R Block’s proposal to address the problems consumers face with unscrupulous preparers:
- Enacting legislation that sets standards for professional tax return preparers. Standards provide an objective measure for consumers to measure and monitor the overall competency, expertise, and performance of tax return preparers. This is critical because the ultimate goal is to protect taxpayers, and help them file more complete and accurate returns. Taxpayers agree with this idea: a recent national survey found nine out of 10 consumers support requiring professional tax preparers to meet minimum training standards.
- Consistently implementing fraud prevention measures across all tax preparation methods. Differences in standards across preparation methods creates incentives for filers to use methods with less documentation requirements and loopholes for ghost preparers who don’t want to comply with the paid preparer requirements – they simply use a Do-it-Yourself product. Additional protections must be built into tax preparation software, which can reduce errors as well as combat tax fraud and reduce the rate of improper payments of refundable tax credits.
Cobb noted H&R Block has been a leader in this area, pointing out its long-standing requirements that its tax return preparers meet stringent education and competency standards. He also noted that approximately 40 percent of all H&R Block locations are owned and operated by franchisees, giving the company a unique perspective into the effects on small business owners if minimum standards are implemented. These insights have helped to inform the company’s ongoing efforts to establish national minimum standards for all return preparers as the next step in better serving and protecting all consumers.
The Tax Institute at H&R Block released a white paper at the hearing as well, detailing the background of previous efforts at creating minimum standards, and outlining specific steps Congress can take to protect the 60 percent of consumers who get help with their taxes each year.
Finally, understanding that for consumers, receiving a tax refund or paying taxes is one of the biggest financial transactions of the year for Americans, Cobb urged a voluntary certification program be created, as supported by IRS Commissioner Koskinen and the National Taxpayer Advocate, until Congress is able to enact legislation. These standards are nothing less than essential for protecting consumers, combating fraud and reducing improper payments.
The full white paper and other materials from the hearing are available below:
Tax Return Preparer Standards: An Important Tool to Improve Tax Return Accuracy, Combat Fraud, & Protect Consumers
William Cobb Prepared Remarks: Senate Finance Committee Hearing on Protecting Taxpayers from Incompetent and Unethical Return Preparers
The Tax Institute at H&R Block Report: Consumer Tax Fraud: Sources & Solutions