Reporting tax preparer misconduct


IRS issues feckless policy statement on reporting tax preparer misconduct


Some days, some days really —  I wish I could write about something else besides the IRS (well I suppose I could, but I have a brand's integrity to maintain).  Yet *sigh*, the combination of the effectively unlimited power and the effectively unadministrable IRS, just sort of gets me down in the dumps. You see, the IRS is not really a bull in a china shop like many of the nation's tax policy experts have probably said. A more apt metaphor is that the IRS is a child with unlimited powers who wants to play with you.  He demands you play with him! Yet, he doesn't really play that nice and makes up rules on-the-fly that benefit him, or states them in a language only he can understand (though they are enforceable nonetheless). But yet — you have to say nice things about this child, as he can hear your thoughts. All your thoughts!

Uh oh. I think it may be best if I adjust my attitude about now.


So, um, what I mean is, that it is a good thing that IRS issued this policy statement. It is a real good thing:


"Internal Revenue Service: Policy statement: Preparer misconduct

Policy Statement P–25–2
Effective: February 23, 2015
Return Preparer Misconduct

(1)    Assisting taxpayers who report they are victims of preparer misconduct.

(2)    The Internal Revenue Service (IRS) will assist victims of misconduct by individuals in the business of preparing tax returns. The IRS recognizes the need for consistency across its functions to ensure the applicable and timely resolution of taxpayer account issues where the taxpayer establishes preparer misconduct with sufficient documentation. Where appropriate, the IRS may require or encourage victims to report instances of preparer misconduct to other federal, state and local agencies. (emphasis added)

(3)    Appropriate federal agencies to which victims can report instances of misconduct may include the Federal Trade Commission, the Consumer Finance Protection Bureau and the Social Security Administration.

(4)    Appropriate state and local agencies to which victims can report instances of misconduct may include consumer protection agencies; such as the Better Business Bureau, state attorney general offices; practitioner licensing organizations, such as state boards of accountancy; and law enforcement agencies."


It is a good thing the IRS imposes a non-delegable duty to comply with a US tax code that no one at the IRS, or in the entire world, can fully understand. It's a good thing the IRS taxes people on their income no matter where the income is earned. It's a good thing the IRS is committed to fairness. For example, it is a good thing that the IRS holds taxpayers primarily responsible for any errors, even when completing a compliance document like Form 5471 which can take up to 80 hours to complete. It's good that the IRS appropriates two weeks of labor from people who have an over 10% interest in a foreign corporation and need to file such a Form 5471. It's a good thing that there's lot of other forms just like Form 5471.


It is a good thing that the IRS causes Americans to spend somewhere between $313 billion and $1.3 trillion per year trying to comply with whatever the IRS dictates.​


It is a good thing that when a taxpayer hires a tax preparer who takes advantage of him, or is in over his head, the IRS will give lip service rather than actually do anything about it. That is, the IRS has just made the bold and daring step of telling people to report bad tax people to the proper authorities — that is, to everyone except the IRS.


Uh oh…the  IRS may actually have a sarcasm meter…oh no, I think my cover is blown. Well, off to the corn field with me.