Friday, January 30, 2009
By BOB LOWRY
Times Staff Writer bob.lowry@htimes.com
Oversight bill to call for licensing, low-income help
MONTGOMERY –With help from aUniversityofAlabamacenter and college students from across the state, Rep. Laura Hall, D-Huntsville, will co-sponsor a bill to regulate “fly-by-night” commercial tax preparers.
The announcement of the legislation was made Thursday on the steps of the state Capitol by Stephen Black, director of UA’s Center for Ethics and Social Responsibility.
The bill, which has bipartisan support, will be sponsored in the Senate by Sen. Quinton Ross Jr., D-Montgomery. It also has the support of state Revenue Commissioner Tim Russell.
The legislation would require individual tax preparers to apply for an annually renewable license, fulfill a continuing education requirement and pass a proficiency exam approved by the Internal Revenue Service. The legislation would also provide free tax preparation to low-income taxpayers.
Ross compared commercial income preparers to cosmetologists, adding, “Why not have the same type of oversight over the industry that prepares taxes, which affects the entire economy of Alabama?”
Hall, who sponsors a Volunteer Income Tax Assistance center inHuntsville, said the VITA center uses computers to get tax returns to customers within seven days. But she said other commercial tax preparation centers inHuntsvillecharge $400 to get a customer a refund immediately through a credit card.
“The thing we try to educate those individuals coming in is, think about what you are paying,” she said. “What can you buy with $400? You can probably buy a dishwasher, if you needed one, your children’s clothes.
“We try to get them to think about how that money would benefit them if they just waited for those seven days.”
Black said one of the projects of the Center for Ethics and Social Responsibility is ImpactAlabama, a student service organization that worked with the IRS to train college students to prepare tax returns for low-income, working families for free. Hundreds of students from 10Alabamacolleges and universities participated in the project.
“We heard a lot of anecdotal stories about commercial tax preparers making serious mistakes, and even things more serious like even willful problems,” he said.
Out of 13 cases in an undercover operation with the students, there were 11 cases of willful fraud by some tax preparers using predatory practices, Black said.
“Partly as a result of this investigation, we have built a bit of a coalition of legislators, a good number of Republicans and Democrats,” he said. “We should put forward a bill that will provide for the first time in the history ofAlabamasome form of an oversight over this commercial tax preparation industry.”
