H & R Block and other tax preparer companies are attempting relax requirements that were just enacted last year. We think that is a bad idea!

Here are our talking points for our opposition to proposed changes to the Maryland Tax Preparers Act (SB 817) http://mlis.state.md.us/2008rs/billfile/sb0817.htm by HB 24 & HB 329

• Give it time to work – We don't even know if the minimum requirements are adequate yet and the DLLR has not even established the Board (or the examination) yet
• Stakeholders (H&R Block & others) had a seat at the table and should not be revisiting this before implementation of the original bill
• Maryland's requirements are bare minimums for tax preparer certification – reducing them makes the purpose of the original bill moot and exposes Maryland taxpayers to incompetent tax preparers (the exact problem the act was intended to stop)
• IRS recognized tax preparers (CPAs, Tax Attorneys, and Enrolled Agents) under Circular 230 are required to meet much higher requirements that those set forth in the Maryland law ands all have independent examinations to test competencies
• Exempting anyone (other than grandfather requirement) from the independent, regulatory-based exam defeats the purpose of the original law and subjects Maryland taxpayers to potentially incompetent tax preparers
• CPAs, accountants, enrolled agents, and the consumer groups that sponsored this bill are all opposed to these changes.

It is important to note that SB 817 involved an extensive stakeholder process that included the Attorneys, Enrolled Agents, CPAs, Accountants, and major Tax preparation companies (H&R Block, Jackson Hewitt). That process provided a forum for discussion and debate and resulted in the enactment of a bill that received overwhelming support. The bill is meant to protect the citizens of Maryland from incompetent or unscrupulous tax preparers – both of these bills will significantly lessen the minimum standards contained in the original bill. Shouldn't we give the original bill a chance to be implemented before changing the minimum standards?
 
Why we oppose HB 24
HB 24 http://mlis.state.md.us/2009rs/billfile/hb0024.htm
 
HB 24 proposes changing the grandfather clause from a requirement of 8 hours of continuing education per year (annual) to 8 hours of continuing education over the entire fifteen years.
 
Considering the significant changes to both the federal and state tax laws that occur every year, we believe this exposes Maryland taxpayers to tax preparers who simply may not know the tax code. Considering that they are exempt from testing – shouldn't they have at least some minimum level of continuing education to keep up on changes?

The IRS requires twelve (12) hours of continuing education (CPE) per year for all Tax Preparers covered under Circular 230 (CPAs, Tax Attorneys, Enrolled Agents).
Licensed CPAs are required to take forty (40) hours of continuing education (CPE) per year to maintain their license.
This bill would say the minimum of eight (8) hours over fifteen years is sufficient to maintain competency as a tax preparer – we believe this is simply not acceptable.

Why we oppose HB 329 http://mlis.state.md.us/2009rs/billfile/HB0329.htm
 
HB 329 which exempts individuals from examination if they complete certain training programs (36 credits approved by MD Higher Education)
 
While education of potential tax preparers is encouraged and expected, the proposed changes would exempt certain organizations (like H&R Block and other tax preparation companies) from testing their preparers for minimum competencies in tax preparation.
 
This would effectively allow them to create the education, offer the education, and pass participants with no oversight and no independent validation. The law as enacted requires an independent, regulatory-based examination. The IRS Special Enrolled Agent exam (Part 1 only) or an examination developed by the Maryland Comptroller or DLLR were suggested. In fact the IRS has offered to work with our DLLR to make their examination available eliminating the costs for Maryland to develop this exam and making it easy and fast to implement should the future board decide.
 
It will be unfair to small, local practitioners who will be required to take an examination while employees of certain companies will be exempt from examination.
 
Major tax companies will avoid oversight completely as they are not regulated or registered and their employees would be able to avoid the examination. In the initial research last year, I recall H&R Block tax preparers were listed in the complaints from the Maryland consumer affairs office, which further supports our case for keeping the examination requirements and not relying on a company education program.
 
For more information about our response to H & R Block's anti-CPA ads see our post:
 
http://www.cpasuccess.com/2009/02/can-somebody-making-700-hour-really-beat-a-cpa.html