Published: August 27, 2024 | Last Updated: April 29, 2025

Increase Awareness of the Need for IRS Oversight of Paid Federal Return Preparers

Background

Return preparers play an essential role in tax administration and, in recent years, paid tax return preparers prepared the majority of the individual income tax returns filed. Many of these preparers have no credentials and are subject to no minimum standards, such as competency tests, continuing education, or ethical rules. IRS data shows that there are significantly more non-credentialed paid tax return preparers than the total of all credentialed paid preparers preparing individual returns and non-credentialed preparers disproportionately serve lower-income taxpayers. For example, non-credentialed preparers prepared approximately 82 percent of the tax year (TY) 2022 individual returns claiming the Earned Income Tax Credit (EITC) that were prepared by paid tax return preparers. IRS oversight of the profession would protect taxpayers by imposing ethical rules on and ensuring a minimum level of competency for paid federal return preparers. The absence of such oversight exposes taxpayers to harm imposed by inept or dishonest return preparers. Because taxpayers bear ultimate responsibility for the accuracy of their own returns, incompetent and unethical return preparers subject taxpayers to unanticipated tax deficiencies, penalties, interest, overpaid taxes, or lost refunds.

Highlights

Status

Expected Completion Date

09/30/2025

Activities

Activity 1: Conduct research in connection with the development of the related Purple Book legislative recommendation to identify statistical data supporting the need to impose minimum competency and ethical standards on paid federal return preparers.

Activity 2: Develop outreach (e.g., NTA Blog, TAS Tax Tips) to raise taxpayer awareness on how to select a reputable tax return preparer.

Activity 3: Meet with congressional members and staff throughout the year and during the Congressional Affairs Program conference, as appropriate, to discuss the Purple Book legislative recommendation to authorize the IRS to establish minimum competency standards for federal tax return preparers.

Actions Completed

1st Quarter

As Filing Season 2025 is beginning, TAS is looking to Congress to pass legislation to regulate return preparers. TAS will resume advocating for return preparer regulation post-Filing Season.

TAS has published a ‘TAS Tax Tip’ warning taxpayers about the current state of tax fraud that focuses on victimizing taxpayers and the importance of carefully selecting a tax professional.

Actions Completed

2nd Quarter

TAS will resume advocating for return preparer regulation post Filing Season. To date, there has been no legislation passed to regulate return preparers.

The National Taxpayer Advocate released a blog celebrating the 50th anniversary of the Earned Income Tax Credit (EITC) that included information on the importance of choosing a preparer carefully. TAS also published a Tax Tip discussing the need to wait for information returns before filing a tax return and to make sure taxpayers are using a reputable tax preparer.

TAS is monitoring the pending legislation titled Taxpayer Assistance and Service “TAS Act”, that would amend the Internal Revenue Code section 6109, which requires all Preparer Tax Identification Number (PTIN) holders to meet minimum standards to retain their PTIN registration. All external outreach in the Taxpayer Advocate Service (TAS) has been paused until further notice so this issue will be addressed once Congressional outreach sessions are restarted.

Next Steps

TAS will monitor and advocate for regulation of return preparers. TAS will resume advocating for return preparer regulation post-Filing Season.

Return to FY25 Objective Statuses