What Were the Biggest Developments for the Tax Profession in 2014?
The two issues that immediately come to mind are IRS-related. The first is the latest development in the service’s efforts to increase tax preparer oversight. [Ed Note: in October, a federal court dismissed a lawsuit that the AICPA had filed challenging the IRS’s Annual Filing Season Program (AFSP). Promoted as a voluntary initiative, the AFSP allows uncredentialed preparers to represent clients before the IRS and obtain a certificate from the service, provided that they register with the government, take 18 hours of continuing professional education and take a competency test.] I think the AFSP is a complete disappointment. You won’t catch the guys impinging on the public—which is the point of the program—if it’s really voluntary. But that stems from the failure of Congress to change the law to allow the IRS to cover and supervise tax return preparation.
The second relates to the IRS’s being underfunded. Congress has slashed the IRS’s budgets as a result of the Lois Lerner fiasco, to the point where the service isn’t able to perform its duties. [Ed. Note: As part of a long-simmering scandal that culminated last year, Lerner, the former director of the IRS’s division on tax-exempt organizations, acknowledged that the service had subjected the Tea Party and other political groups to special scrutiny.] Amended return filings are taking more than a year now—that standard 45-day notice from the IRS has become infamous among preparers. And lately, the IRS has been much quicker to issue a Notice of Deficiency and require us to appeal through U.S. Tax Court, which is a function of their inability to handle the workflow in an appropriate manner. It’s a big issue, one that makes it difficult to get anything done, and it’s only going to get worse: The IRS commissioner himself [John A. Koskinen] said that the 2015 tax filing season will be “miserable,” with even more delays. When you’ve got the commissioner of the IRS coming out and saying that, we have a serious problem facing our system that needs immediate redress.