The Office of Management and Budget released the President’s 2018 budget this morning and NAEA has been reviewing it closely. So far we have found two items of particular interest to our membership.
Under the budget top line number, if passed, the Internal Revenue Service would experience a funding reduction of $239 million from the 2017 level. The total IRS budget for 2018, $10.93 billion, would be roughly the same number from 2010. So, over time this represents a significant reduction in the IRS budget.
However, the budget indicates that the Administration does not intend an increase in fees from enrolled agent renewals.
Additionally, in a completely unexpected move, the budget provides for the following:
Increase oversight of paid tax return preparers. Paid tax return preparers have an important role in tax administration because they assist taxpayers in complying with their obligations under the tax laws. Incompetent and dishonest tax return preparers increase collection costs, reduce revenues, disadvantage taxpayers by potentially subjecting them to penalties and interest as a result of incorrect returns, and undermine confidence in the tax system. To promote high quality services from paid tax return preparers, the proposal would explicitly provide that the Secretary of the Treasury has the authority to regulate all paid tax return preparers. This proposal would be effective as of the date of enactment.
The National Association of Enrolled Agents has been the one organization over the years that has consistently supported minimum standards for unenrolled preparers. We are pleased to see the budget proposal gives the Secretary of the Treasury authority to regulate paid tax return preparers. Right now virtually anyone can hang out a shingle and call themselves a tax expert without demonstrating even basic competence in tax preparation or representation.
Congress and the President have the opportunity to establish minimum federal standards for tax return preparers and in the process, help protect taxpayers while saving the government hundreds of millions of dollars in fraudulent refund payments.
Cedric Calhoun, FASAE, CAE
Executive Vice President
National Association of Enrolled Agents