It is obvious that the IRS is not going to properly initiate a voluntary tax preparer credential.  I outlined the proper way in my TAXPRO TODAY editorial “What the IRS Should Do About the RTRP”.  It is expected that the Service’s recently announced non-credentialed certification/regulation scheme, the Annual Filing Season Program, if it survives the AICPA lawsuit intact, will very likely be ignored by most unenrolled preparers. 


The IRS online database that was part of the AFSP, and was in the initial discussion of a voluntary program called a database of “approved” tax preparers, should be a database of all PTIN-holders.  The IRS should not be identifying only certain PTIN-holders as being “approved”.  All individuals who register with the IRS and receive, and maintain, a valid PTIN are permitted by law to prepare federal income tax returns for compensation, and therefore all valid PTIN-holders are “approved” preparers.


The database should be an alphabetical listing by last name, with any “recognized” credential (EA, ATP ATA, CPA, JD, “Record of Completion”), of all PTIN-holders.  There should be two types of search capabilities.  Taxpayers should be able to search for individual preparers by name to verify that the preparer has indeed registered with the IRS and possesses a valid PTIN.  And taxpayers should be able to create a list of valid PTIN-holders in their geographical area, with the list further restricted by specific credentials.  For example all PTIN-holders in Wayne County PA with the ATP or EA credential.


The introduction to the database should clearly state that only EAs, ATPs, and ATAs (and holders of the AFSP “Record of Completion” if the program survives the AICPA lawsuit and the Service insists on continuing it) have demonstrated competence and currency in 1040 preparation via testing and mandatory CPE in taxation and that only EAs, CPAs, and attorneys are authorized to “practice” before all levels of the Internal Revenue Service.


The voluntary tax preparer credential should be issued and administered by an independent industry-based organization, as I discussed in another TAXPRO TODAY editorial titled “It’s Time for Independent Certification for Tax Preparers”.  This credential must be “recognized” by all legitimate tax preparer membership organizations and by the Internal Revenue Service.


There is no need to create a new organization and a new credential when we already have the Accreditation Council for Accountancy and Taxation, created by and affiliated with the “other” NSA (National Society of Accountants), and its Accredited Tax Preparer (ATP) and Accredited Tax Advisor (ATA) credentials.  The ATP is for basic 1040 preparers and the ATA is for practitioners who handle more sophisticated tax planning issues, including ownership of closely held businesses, qualified retirement plans and complex estates. 


An ATA must maintain 72 hours of CPE during each three-year cycle or 24 CPE hours per year, similar to the EA, and an ATA must maintain 90 hours during each three-year cycle or 30 hours per year.  The 72 and 90 hours must include 4 hours of ethics preaching – which is a bit better than the annual 2-hour requirement of the ATSP.  These CPE requirements are in excess of the ATSP 18 hours per year, so these credentials clearly meet the alleged purpose of the ATSP - giving “unenrolled return preparers a way to stay to up-to-date on tax laws and changes”.


Preparers with ACAT credentials are exempt from the annual 6 hour federal tax filing season refresher course and corresponding annual test requirement of the AFSP, so the IRS obviously “recognizes” these credentials as being valid “proof” of competence and currency in tax return preparation.


The initial competency examination component of the ACAT tax credentials should satisfy National Taxpayer Advocate Nina Olsen.  Her support of the IRS voluntary program was tentative; she felt the program should include an initial competency test requirement.


The ACAT needs to add members of other legitimate tax preparer membership organizations to its Board of Trustees and be publicly “recognized” by these other organizations as “the” voluntary non-“practice” tax preparer credential.  And it needs to engage in an extensive publicity campaign to educate the public about the ATP and ATA credentials.


With universally accepted, and highly publicized, ATP and ATA non-”practice” tax preparer credentials the taxpayer public would be able to clearly identify preparers who have proven competence and currency in 1040 preparation.

So fellow tax pros - what do you think of my solution?






The National Association of Tax Professionals annual National Conference and Expo is an excellent source of qualify continuing professional education for all levels of tax preparers.


It is also a great opportunity for a tax deductible vacation visiting a location that you might not otherwise visit.


Over the years I have visited Alexandria, Anaheim, Arlington, Atlanta, Austin, Boston, Corpus Christi, Las Vegas, Minneapolis, New Orleans, Orlando, Reno, Sans Antonio, Diego, Francisco, and Juan, Washington DC, and other locations as a registrant of various tax membership organization conferences and conventions, and deducted my travel expenses.


This year’s Conference is August 11-14 in Orlando at the Orlando Marriott World Center.  I will not be attending.  I have been to Orlando twice before for conferences or conventions – and that is enough for me.  I am not a fan of excessive heat.


FYI, here are the dates and locations of the next three Conferences, so you can plan accordingly -


The 2015 Conference will be July 20-23 in New Orleans, LA

The 2016 Conference will be August 9-12 in Indianapolis, IN

The 2017 Conference will be August 7-10 in Washington, DC


I expect to attend all three.    


Here is a tip.  The Conference is usually held at a high-end hotel – Hilton, Hyatt, Marriot, etc.  While there is a special “conference rate”, staying at the host hotel is still relatively expensive.  I have on occasion booked my room at a nearby less-expensive mid-level hotel or motel.  Even if I had to take a taxi to and from the Conference I still realized substantial savings.


And do not assume the advertised “conference rate” is the lowest price for a room at the host hotel.  Just this year I booked a room in the host hotel for two different NATP Atlantic City events at a rate lower than the conference rate by booking directly online.  And using AAA or AARP discounts instead of the conference rate can also produce savings. 


Every tax professional, especially the “unenrolled”, should belong to NATP.  If you would like information on membership send me an email at [email protected] with “NATP Inquiry” in the “subject line”.






(1) IRS information return 1098-T, which is supposed to provide information for claiming the various education tax benefits, is as useful as tits on a bull.


Box 1 of the 1098-T is for payments received “from any source” for qualified tuition and related expenses.  This is the information I need.  However in the years that this form has been in use I have only seen an entry in this box once – and it was incorrect.  It showed only the payments received directly from the student (actually the student’s parents).


Box 2 is for amounts billed for qualified tuition and related expenses.  This is the box that is always filled in.  To be honest, I don’t care a rat’s hind quarters how much was “billed”.  My clients are cash-basis taxpayers – I need to know what was paid during the calendar year, not what was billed.


Colleges will generally bill students for the semester beginning in January of the following year at the end of the current year.  So the amount in Box 2 usually includes this amount.  But parents or students do not always pay this amount until the following year.


In my instructions to clients I ask for not only the Form 1098-T, but also “all the ‘Bursar’s Reports’ for the year”.  Often a student can access his/her financial account history online, and I ask parents to provide me with a print-out of this report.


Thankfully some colleges and universities will provide a supplement to the Form 1098-T mailing that itemizes the various charges and payments made for the year by date, which is extremely helpful.  But unfortunately not all.


In 2012 I received a Form 1098-T for a student who had graduated in 2011.  Box 1 and Box 2 were both empty, but there was an amount for scholarships and grants in Box 5.  Upon questioning the taxpayer I discovered that there were indeed payments made for qualified tuition and fees in calendar year 2011.  These payments had been billed in 2010, and were included in Box 2 of the 2010 Form 1098-T. 


I further learned that the student did not receive any scholarships or grants from anyone in 2010 or 2011.  The amount reported by the school in Box 5 was a payment for tuition and fees made via a student loan.  The school really FU-ed – the amount reported in Box 5 should have been reported in Box 1!  As a result I was able to claim one of the tuition tax benefits.  If I had relied on the Form 1098-T I would have claimed nothing.


If the IRS is going to have a Form 1098-T with a Box 1 asking for payments made from all sources for the calendar year then it should require educational institutions issuing the form to include an entry in Box 1.  Why have this box on the form if it is not required to be used?  And, based on the above experience, perhaps the schools should be required to identify the amounts reported in Box 5 by source somewhere on the return. 


(2) A change on the Form 8949 for 2013 returns was truly welcomed.  Some investors were able to enter “covered” sales directly on Schedule D and bypass reporting the details of specific transactions on Form 8949. 


According to the Schedule D instructions –


You can report on line 1a (for short-term transactions) or line 8a (for long-term transactions) the aggregate totals from any transactions (except sales of collectibles) for which:


* You received a Form 1099-B (or substitute statement) that shows basis was reported to the IRS and does not show a nondeductible wash sale loss in box 5, and


* You do not need to make any adjustments to the basis or type of gain or loss (short term or long term) reported on Form 1099-B (or substitute statement) or to your gain or loss.”


This new procedure was a godsend – as I did not have to waste as much valuable time “cutting and pasting” dozens of pages of 1099-B detail as supplements to multiple 8949s.  Unfortunately even as little as $1.00 in wash sale adjustments could void its use. 


The IRS should allow this procedure to be used if the only adjustment to cost basis is a wash sale adjustment that has been reported to the IRS.


And brokerage houses should be allowed the option of reporting the cost basis of “non-covered” sales to the IRS on Form 1099B if the investment was purchased by the same firm that is reporting the sale, expanding the use of this great new procedure.


So – do you agree?






Go here to sign up to receive CCH’s week-day daily email newsletter “Tax News Headlines”, a daily summary of the most important federal and state tax news stories.


This email newsletter includes a “CCH Weekly Report from Washington, D.C.”, with a summary of the week’s tax-related activity by the White House, Congress, the IRS, and the Treasury Department.


You can also sign up for other CCH email newsletters and alerts here.  CCH publishes free Tax Briefings on all tax legislation, and you can receive an alert each time a new Tax Briefing is published.


Go here to sign up for the “AccountantsWorld Daily Headline News” week-day daily email newsletter.