US Senate considers regulating tax preparers

Tax-filing

TERRE HAUTE, Ind. (WTHI) – The U.S. Senate took up the issue of whether tax preparers should be licensed in some way.

Tax preparers in Indiana and Illinois are not required to have a license.  One local tax expert says there are a lot of fly by night tax preparers right here in Terre Haute who have no business doing your taxes.

The Internal Revenue Service wants to require licensing for all tax preparers.

Currently only the states of Oregon, California, New York and Maryland regulate tax preparers.  This means practically anyone can call themselves a tax preparer in Indiana and Illinois.

“They can rent a store front, buy some software, yet don’t have a clue what they’re doing.  We have a lot of them here in Terre Haute and the Wabash Valley that fit that description,” said Andy Stadler, who owns Stadler Tax Service.

Currently, there are two certifications in the world of tax preparation.

VIDEO | Full interview with Andy Stadler

Certified public accountants, or CAP’s, are certified through the state in which they work.

Stadler is what’s called an “enrolled agent.”  That licensing is obtained through the U.S Treasury Department.  Tax preparers at Stadler and Company are enrolled agents, or are working to complete the enrolled agent licensing and go through extensive testing and training over the U.S tax code.

“Both of them are going to be very good, very qualified folks,” said Stadler.

Having a CPA or an enrolled agent on your side is crucial if you are audited.  Stadler some of his clients come to him to fix problems caused by non-licensed tax preparers.

Usually, those preparers are out of business after April 15th, leaving you all alone if you receive an audit from the IRS.

“It’s like going to court all by yourself.  You really don’t know the rules.  You really don’t know what you should or should not be doing.  And the IRS, well, they’re not your best friend,” said Stadler.

Editorial writers for the Wall Street Journal say licensing of tax preparers could favor national chains, such as H & R Block.  Stadler told News 10 he’s in favor of licensing as a means of protecting consumers.

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