More trustworthy: your tax preparer or your body piercer?

We’re starting to see, it seems, an increasing number of notices from Missouri’s federal prosecutors that talk about tax preparers who run various kinds of frauds. If you’ve been following along, you might have noticed it, too. Perhaps some questions or issues might have crossed your mind as you have read these accounts.
–as usual, a few creeps make legitimate hard-working tax preparers look bad.
–who lets these creeps go into business to begin with?
–are there standards for these people?
First, that’s true. Bad seeds often raise questions about the good apples in the barrel.
Second, anybody can be a tax preparer.
Third, if there are standards, they are not set by the government. At least not in Missouri.
The U. S. Tax Code is 74,000 pages long. Most of Missouri’s tax preparers are volunteers or part-timers. The Institute for Justice estimates there are more about 1.2 million tax preparers in the country. The IRS thinks more than sixty percent of all returns are done by preparers, about half of whom are not regulated.
We saw a quote the other day from Bill Cobb, the CEO of H&R Block, who said, “Something is out of whack when you are better protected getting your hair cut than sitting across the desk from a tax preparer.”
He’s right. Missouri has an entire department that oversees licensed professionals: Department of Insurance, Financial Institutions, and Professional Registration. DIFIPR. It’s not an acronym we pronounce in our newscasts. In fact, we refer to the department by three different names depending on the circumstances. Department of Insurance. Department of Financial Institutions (such as when the state takes over a bank) or Department of Professional Registration.
Our handy state roster of government agencies lists a state board of accountants, state boards for architects, professional engineers, professional land surveyors and landscape architects, an office of athletics (for boxing and wrestling and the like), a board of Chiropractic Examiners, a board for Private Investigator Examiners, an advisory board for Behavior analysts, a committee for social workers, a board of cosmetology and barber examiners, a dental board, a board for embalmers and funeral directors, an office to oversee endowed care cemeteries, the well-known board of registration for the healing arts (it licenses doctors, etc.), the board of examiners for hearing instrument specialists, boards of nursing, optometry, and pharmacy (separate boards), a commission for professional physical therapists, boards for foot doctors, and for veterinarians, committees for professional counselors, psychologists, marital and family therapists, interpreters, dieticians, and acupuncturists. There are commissions for real estate appraisers, a separate one for real estate—well, Good Lord, we could go on and on. There are forty boards, commissions, committees–whatever–for regulation of various professions.
Missourians have to be regulated and pass state exams to apply makeup, cut hair, pull teeth, rub us the right way, figure out what a rock is, Feng Shui our bedrooms, stick pins in us, and give us gas. But nobody has to prove they know what is in 74,000 pages of the federal tax code.
Only four states require training and licensing of tax preparers: California, Oregon, Maryland, and New York.
Yep, Missouri doesn’t require them to be trained although some companies that hire a lot of preparers do offer them some training.
The legislature almost every year has some group or another wanting the state to license its practitioners. Some think the requests are intended to limit opportunities for people to practice that profession, or to work in that field. Promoters describe state licensing as a consumer protection issue.
We took a quick peruse of licensing legislation proposed this year and see that there are bills for clinical lab personnel, midwives, electrical contractors and corporate security advisors. Might be more but our attention span ran out as we looked at the list.
So as the legislature worries about whether it can convince Governor Nixon and his staff to at least read a 700-page criminal code revision, we have people doing our taxes under increasing deadline pressure who have to deal with a 74,000-page IRS Code. And there seems to be no particular urgency about licensing and regulating them.
There is another licensing office you might find interesting as you ponder how well your tax return is done by an unlicensed tax preparer.
Missouri has an office of Tattooing, Branding, and Body Piercing.
Somebody has to be licensed to stick a jewel in your tattooed navel. But not to do your taxes.
What do you want to bet that you hear or see a story about a tax preparer committing fraud before you see a story about a fraudulent body piercer?

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