Regulating Tax Preparers

I'm often reminded when I prepare an amended return, why preparers should be licensed. Granted, as a selling point, I always point out that the returns I prepare are prepared by a CPA, when that is not always the case.



A few months ago Fox News pointed out this: http://www.foxnews.com/story/0,2933,548827,00.html?test=latestnews



They try to use it as trying to label ACORN as teaching the Pimp how to lie to the IRS, but the underlying fact is that the staffer had no idea of the implecations of preparing a false return.



Last season, I prepared a schedule c, amended return for a client with a home business. It was amended because his mortgage broker had told him "If you file your return and don't show the expenses for your (successful) home business, it will show much more income, and you can finance a better house....." as he was buying a house at the time. He did what the "advisor" recommended (and paid a hefty tax payment) by filing his taxes online -- doing it himself. All to save my fee, and to buy a house that his income/debt ratio said he couldn't afford.



It's a wonder we're having a mortgage crisis with brokers like that, but it also brings into question -- Are people qualified to prepare their own returns --- even with turbo tax or tax act? This person obviously didn't know the implecations of filing a false return, nor did he read the fine print when signing his mortgage (if he bought a house). By signing, he was verifying the information in the application was accurate, to the best of his knowledge. Is it criminal?



I have no problem holding preparers accountable for their own error, but if I commit a crime, such as preparing a false return for the purpose of lying about your income? not knowing the law is no excuse.