Jennifer MacMillan, a board member of the National Association of Enrolled Agents (NAEA), recently shared her insights in an article for BloombergTax, highlighting the urgent need for Congress to empower the IRS with the authority to set minimum standards for tax preparers. MacMillan underscores that the proposed revisions to Circular 230, while addressing outdated provisions, fail to tackle the core issue: the lack of IRS authority to enforce basic standards for all tax professionals.

Key Takeaways from MacMillan’s Article:

  • The proposed regulations, issued on Dec. 20, aim to update Circular 230 to reflect court rulings and current practices but fall short in addressing the IRS’s authority limitations.
  • Changes include removing references to tax return preparation and redefining contingent fees as disreputable conduct.
  • A significant concern is the proposal to allow non-credentialed tax preparers to represent clients before certain IRS personnel, potentially compromising taxpayer protections.
  • MacMillan emphasizes that without Congressional action, the IRS remains powerless to implement essential oversight measures like continuing education requirements and background checks for preparers.

Read the full article on BloombergTax here.

NAEA Advocacy Efforts:

The NAEA has been actively advocating for several key issues impacting tax professionals and taxpayers alike:

  1. Protecting IRS Funding:
    NAEA President Twila Midwood recently urged Congressional leaders to safeguard IRS funding for modernization, technology upgrades, and customer service. With the current continuing resolution expiring on March 14, 2025, Midwood stressed the importance of maintaining progress in IRS efficiency and taxpayer services.
  2. Comments on Proposed Circular 230 Changes:
    The NAEA is encouraging members to submit comments on the proposed Circular 230 regulations, particularly regarding the expansion of representation rights to non-credentialed preparers. Members can personalize a template letter and submit comments by February 24, 2025. A public hearing is scheduled for March 6, 2025.
  3. Minimum Standards in Senate Finance Committee Draft:
    The Senate Finance Committee’s recent bipartisan discussion draft includes language granting the IRS authority to enforce minimum standards for tax preparers. The NAEA collaborated closely on this proposal and encourages members to submit feedback by March 31, 2025. Comments on this discussion draft can be sent to discussiondraft@finance.senate.gov.

For more information or to get involved, contact the NAEA advocacy team at advocacy@naea.org or call (202) 822-6232.

Stay informed and engaged as we work together to strengthen the integrity and professionalism of the tax preparation industry.