Treasury Inspector General for Tax Administration
July 17, 2012
TIGTA - 2012-31
Contact: David Barnes
WASHINGTON – A project created by the Internal Revenue Service (IRS) to assess the services of tax return preparers by visiting them around the country has been correctly implemented, but its effectiveness remains to be determined.
That is the principal finding of a report released today by the Treasury Inspector General for Tax Administration concerning the IRS’s Return Preparer Visitation Project (RPVP). TIGTA initiated its review because the IRS included objectives in its Strategic Plan for Fiscal Years (FY) 2009–2013 to strengthen partnerships with tax practitioners and ensure that paid preparers and other third parties adhere to professional standards and follow the law. The overall objective of the review was to evaluate the effectiveness of the IRS’s efforts to conduct visitations to paid preparers to improve the accuracy and quality of filed tax returns.
“The role paid tax return preparers play on voluntary compliance in the United States has become increasingly important,” said J. Russell George, the Treasury Inspector General for Tax Administration. “With some improvements, this project may yield vital information.”
RPVP managers were tasked with developing a methodology for revenue agents to visit paid preparers. TIGTA’s analyses of IRS data showed the RPVP issued letters to more than 10,000 paid preparers, and revenue agents completed 2,404 visits, or 96 percent of the FY 2010 RPVP goal. In addition, TIGTA found that in FY 2011, the RPVP issued letters to more than 10,000 paid preparers and conducted 2,498 visitations, or nearly 100 percent of its goal.
TIGTA evaluated the methodology used to select paid preparers and determined that those visited may not have benefited the most from an educational visit. Based on survey responses by the preparers, several paid preparers remarked that the use of IRS resources to visit their office was wasteful because their continuing professional education requirements were much more extensive than the information presented by the revenue agents. TIGTA also determined that the RPVP did not have performance measures or tracking procedures to successfully evaluate its effectiveness.
TIGTA recommended that the IRS ensure that the RPVP uses data-driven selection criteria to specifically identify paid preparers who filed tax returns with errors to make certain the most egregious paid preparers are receiving educational and enforcement visitations.
In addition, the IRS should develop specific performance measures and internal controls that can be used to assess the impact of the RPVP on the paid preparer community. This effort should include a process to monitor and track the behavior of paid preparers visited to determine whether the quality and accuracy of tax returns improved.
In their response to the report, IRS officials agreed with both recommendations and stated they have already begun their implementation. The IRS concurred that, over time, both recommendations will help to improve the quality and accuracy of filed tax returns as well as heighten paid preparers' awareness of their responsibilities.
Read the report.
Note: The difference between the date TIGTA issues an audit report to the Internal Revenue Service and the date TIGTA publicly releases the report is due to TIGTA's internal review process to ensure that public release is in compliance with Federal confidentiality laws.
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