The IRS announced late yesterday that it will begin regulating those tax preparers who are not Attorneys, CPAs or Enrolled Agents. This is great news for taxpayers who have sought out these preparers and find the quality and integrity of these preparers ranging widely from downright fraudulent to incompetent to compentent to highly competent.

It is quite discouraging to represent taxpayers who have wound up being audited as a result of being a client of one of these preparers who are on the IRS’ “problem preparer” list or one who just isn’t aware of how to prepare an audit proof tax return. Perhaps now, the IRS’ initiative in this area will protect taxpayers from the worst of the worst.

These tax preparers will now have to register with the IRS, undergo a shallow background check and take 15 hours a year of continuing education in the tax field (1/2 of what Enrolled Agents are required to take). They will also be subject to preparer penalties for taking improper positions on tax returns and for improperly disclosing their client’s information to third parties.

It will probably take several years to weed out the bad tax preparers. In the meantime, everyone needs to be careful and seek preparers who have been regulated for many years, including CPAs and Enrolled Agents.