April 08,2014

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Wyden Says Taxpayers Deserve Protection from Incompetent and Unethical Tax Return Preparers

Chairman Says Tax Reform Is Needed to Simplify the Code and Make Filing Easier

WASHINGTON –Senate Finance Committee Chairman Ron Wyden, D-Ore., today led a hearing to investigate the threat to taxpayers from incompetent or unethical tax return preparers and to identify potential solutions to protect consumers. The committee heard compelling testimony from IRS commissioner John Koskinen, National Taxpayer Advocate Nina Olson, the GAO, and credentialed tax return preparers and advocates from across the country.

“Taxpayers today face a double burden – crooked or incompetent tax preparers along with an overgrown and complicated tax code. We should put an end to both,” Wyden said. “I’m proud to say my state gets this issue right. While Oregon and a few other states are already leading in this area, we need to restore federal standards to protect all American taxpayers.”

Wyden said unlike many other industries, paid tax return preparers don’t have to meet any standards for competence in order to prepare someone else’s return. As a result, this lack of meaningful oversight too often harms those citizens who need it most. Following a decision by the federal appeals court in Loving v. IRS, taxpayer protections against incompetence and fraud were significantly weakened.

Wyden also touted Oregon’s leadership in this field. Oregon has one of the longest standing and strongest taxpayer protection standards. A 2008 study by the GAO found that tax returns from Oregon were 72 percent more likely to be accurate than returns from the rest of the country.

At the hearing, the GAO unveiled the results of a new investigation involving undercover site visits where 17 of 19 randomly selected, paid tax return preparers failed to complete a tax return accurately, either due to significant mistakes or willful negligence. This latest GAO investigation reported findings similar to those of GAO’s 2006 investigation that identified preparer mistakes in 19 of 19 undercover visits. The full report can be found here.

Watch Wyden’s remarks here. The full text of the statement is available here.