NCTC Issues Comments on IRS Continuing Education Provider Rules
In response to a notice for written comments from the IRS, NCTC issued official comments on the approval process for continuing education providers and provider accrediting organizations in relation to the ongoing implementation of new paid preparer regulations.
The following comments were submitted by NCTC to the IRS on August 17, 2011 in response to an official request for comments on the approval process for continuing education providers and the accrediting organizations of these providers.
The comments focus on a need for continuing education providers to demonstrate their practical knowledge and skills of both tax law and their abilities to address the needs of our nation’s low-income taxpayers. NCTC also recommends the IRS consider a fast-track process for approving VITA programs as providers as well as an approval process for national and regional coalitions of VITA programs with proven training records to serve as accrediting organizations.
Please feel free to add your comments below to keep our discussion of the broader reforms for paid preparers active and up-to-date.
As the nation’s leading coalition of non-profit, voluntary entities providing free tax preparation assistance and services to low-income individuals and families, the National Community Tax Coalition (NCTC) is submitting the following written recommendations in response to the request for public comments on how individuals or entities may be approved by the IRS as continuing education providers or as accrediting organizations of these providers (Notice 2011-61). In recognition of the efforts of the Volunteer Income Tax Assistance (VITA) programs represented by our coalition to ensure high-quality tax preparation services to our nation’s low-income taxpayers, NCTC would like to emphasize the need for strong and clearly defined principles and regulations to guarantee the quality of continuing education received and the requisite expertise of those providing such services to all tax preparers. Further, NCTC would like to strongly encourage the IRS to tap the existing resources of VITA programs and their associated national and regional coalitions to serve as both continuing education providers and accrediting organizations respectively. As a representative of a field of over 50,000 highly skilled volunteer tax return preparers, we would like to recommend the following:
Continuing education providers must be able to demonstrate extensive knowledge of tax law and practical tax preparation experience as it relates to serving the most vulnerable taxpaying populations.
Prior to selection as a continuing education provider, the IRS must certify the extent to which the applying individual or entity is skilled in tax law as well as their practical experience with tax preparation. NCTC believes that particular emphasis in this area should be placed on demonstrating a provider’s ability to educate preparers on the specific needs of our underserved and most vulnerable taxpaying populations. Such ability must include but is not limited to:
- Knowledge of the Earned Income Tax Credit (EITC) and associated qualifying child rules,
- Correct identification of filing statuses and exemptions for households other than two parent married arrangements,
- Ability to address issues associated with ITIN filers, and
- Knowledge of preparing returns for the newly self-employed.
This list of topics is by no means complete, and NCTC would like to offer ongoing support to the IRS to develop a comprehensive guide for topics to be covered by all continuing education providers.
In addition to specific areas of tax law, continuing education providers should be required to demonstrate a high level of experience with direct tax preparation either individually or by certifying the level of experience of individuals employed by a providing entity who are directly involved in curriculum development or instruction. Emphasis in establishing the quality of these providers should be placed on client interviewing skills, years of direct preparation provision, and demonstrated experience dealing with adverse or special tax preparation issues including but not limited to:
- Preparing returns for taxpayers with inadequate records,
- Advising clients on collection matters including means for handling balance due issues,
- Dealing with potentially misclassified workers for the purpose of employment status (i.e. as a full-fledged employee rather than an independent contractor),
- Informing clients of the various tax benefits for higher education pursuits, and
- Advising clients on W-4 preparation and estimated taxes.
Direct client communication skills are vital to ensuring the accuracy of prepared tax returns, particularly on behalf of low-income taxpayers who often require skilled assistance to correctly claim vital refundable tax credits including the EITC and the Additional Child Tax Credit. VITA programs are proud to emphasize the use of the IRS-developed Form 13614-C to enhance the quality of information gathering and client interviewing by volunteer tax preparers to assist clients in filing the most accurate returns possible. In developing guidelines for approving continuing education providers for paid preparers, NCTC hopes the IRS will require similar proof of adherence to high-quality client service rules.
VITA programs that meet the requisite experience requirements should be permitted to serve as continuing education providers.
Under the oversight of the Stakeholder Partnerships, Education and Communication (SPEC) function of the IRS Wage & Investment Division, VITA programs are subjected to extensive quality reviews and regulations relating to the annually required training of volunteer tax preparers covering the full range of skill levels. Moreover, by receiving recommendations from annual audits and ongoing alerts to the field of arising issues of tax preparation quality, VITA programs have a proven record of quickly implementing the latest training techniques both before and during tax filing seasons.
We believe that VITA programs and our volunteer trainers are strongly suited to serve as continuing education providers. Given the ongoing supervision and scrutiny of VITA training procedures, the IRS in consultation with its SPEC personnel should specifically develop the means for fast-tracking approval of VITA programs as continuing education providers while ensuring all providers are held to the same approval standards. VITA programs meeting the requirements approved by the IRS should be notified no later than August 31 of each approved year to allow programs to adequately incorporate issues specific to continuing education into their annual training procedures.
National organizations or regional groups serving multiple community tax preparation programs with at least 3 years of training experience should be permitted to serve as accrediting organizations.
NCTC and similar coalitions maintain a strong reputation of enhancing the quality of training in the VITA field by widely disseminating quality alerts from the IRS, by issuing annual recommendations to improve return quality in advance of preparer trainings, and by hosting frequent and ongoing web-based trainings on a broad range of tax-related topics. Permitting national and regional community tax preparation organizations with well-developed training programs and established relationships with the IRS to serve as accrediting organizations would not only cost-effectively capitalize on existing training networks but could also provide a means for supporting the community tax preparation field beyond the already limited reach of the Community VITA Matching Grant program.
We greatly appreciate this opportunity to submit our comments on the future processes for approving continuing education providers and their accrediting organizations. NCTC is strongly supportive of any and all efforts of the IRS to enhance the quality of tax preparers especially when such preparers could impact the livelihoods and well-being of our nation’s low-income individuals and families. If you would like to discuss these comments further, please do not hesitate to contact me at your nearest convenience.
By Holden Weisman, Policy Analyst