The Obama, Congress, Koskinen Tax Triangle
In decades past, and the last year especially, it has become clear that congressional office holders have more trouble working with each other than against each other. While that would be totally acceptable if our mail goal as a nation, as a people was complete stagnation, this is a real problem when applied to our nation’s tax problems.
Laughably, yes, each of us, as a citizen, “owes” a large share of the national debt, but in an effort to prevent throwing out the baby with the bath water, this writer suggests that perhaps we should start locating and making changes where the problem exists. Regarding the nation’s tax system, one of the biggest problems is preparer fraud and/or incompetence which leads to larger refunds going to citizens who are not entitled this additional money from the taxpayers pocket. Large, initially-unverified refundable credits are issued quickly in an effort to comply with one of the IRS’ initiatives of dispersing refunds quickly, but the IRS has a much more difficult time getting that extra money back. Penalties, you cry? Again, I’m laughing. Interest and penalties are easily negotiated away with good reason, and if you aren’t a corporation, the interest rates are still lower than my student loan interest rate.
Ok, we’re almost up to speed. The IRS lost its court case with the civil war horse defense. Go figure. Now, it’s up to Congress to pass industry cleaning legislation which will grant the IRS statutory authority to regulate currently unenrolled preparers, in addition to the already regulated enrolled agents, attorneys and CPAs. These unenrolled preparers were previously called Registered Tax Return Preparers (RTRPs).
Here we are, at the precipice of the tax industry revolution, the moment of truth and prediction. Get your bets ready.
The juicy part you ask? Obama asked Congress to pass a law that would specifically empower the Internal Revenue Service to regulate preparers. However, the new IRS commissioner, formerly a Freddie Mac chairman, doesn’t care much for required minimum preparer educational standards (like almost every other industry has, mind you). Instead, he favors voluntarily preparer education. What we have here, folks, is a good, old fashioned tax triangle. (Financial version of a love triangle.)
As our fiscal bloodbath continues, we, the people, will all suffer while enjoying the spectacle.
Posted: March 19, 2014