Friday, January 30, 2009
RUSSELL HUBBARD
News staff writer
Alabama legislators said Thursday they plan to introduce a bill that would license and regulate professional tax preparers.
Alabama Sen. Quinton Ross, D-Montgomery, said he plans to sponsor such a bill when the legislature meets again in February. The bill would require tax preparers to pass a test, register with a regulatory board, and suffer penalties for noncompliance.
“There is money being left on the table because some tax preparers aren’t up to par,” Ross said at a press conference Thursday at the Jefferson County Courthouse. “Some minimum standards of proficiency have to be established.”
Also in attendance and supporting the bill Thursday were Alabama Sen. Jabo Waggoner, R-Vestavia Hills; Alabama Sen. Linda Coleman, D-Birmingham; and Alabama Rep. Merika Coleman, D-Birmingham.
The legislative push comes a few days after ImpactAlabama, a nonprofit group that advocates the welfare of working-class people, said an undercover operation showed 100 percent error rates amongAlabamatax preparation services. Problems included hard-selling the most expensive refund options and misapplying tax credits for families with children.
Stephen Black, leader of ImpactAlabamaand director of theUniversityofAlabama’s Center for Ethics and Social Responsibility, said 75 percent of Alabamians use professional tax services.
His group hired 13 tax preparers big and small to file IRS returns in recent weeks. All 13 contained errors, and 11 misapplied the earned income tax credit for parents living apart. The services offered it to whichever parent showed up first. The law says the credit can only be claimed by the parent who has custody of a child for the majority of the year.
Black also said professional tax preparers overcharge for simple returns with no itemization, often charging $400 for 30 minutes of easy calculation. Often, the work was accompanied by offers of an immediate high interest refund anticipation loan, Black said. The bill under consideration would require tax pros to also tell taxpayers they can file electronically for free and get a full refund in about a week.
The proposed tax-preparation licensing bill wouldn’t apply to tax attorneys, certified public accountants or others operating under existing professional regulations, Black said.
E-mail: rhubbard@bhamnews.com
