Sunday, January 18, 2009
David Prather
A bill to license tax preparers in Alabama makes sense
Stephen Foster Black is a Southern do-gooder, and how could he not be with a name that hearkens to the region’s premiere songwriter and lineage that includes grandfather Hugo Black, one of the most famous and important U.S. Supreme Court justices?
Black leads theUniversityofAlabama’s Center for Ethics & Social Responsibility, whose mission statement is evident in its title. It tries to do good work. And its latest effort– which features two distinct but interrelated facets– remains true to its goal.
Black and his associates have examined the tax-preparation industry and found it wanting.
For one thing, tax preparers may or may not be qualified to assist clients. There’s no standard, no required training, no licensing. Black wants that to change.
Also, almost half a million Alabamians qualify for an antipoverty program called the Earned Income Tax Credit. Too many of them don’t know about or understand the program. Too many of those who do use the program wind up paying commercial tax preparers when they could get help for free. And too many who use those preparers are talked into taking out “refund anticipation loans” that are expensive and of marginal help in getting refunds quicker.
As to the issue of qualifications for tax preparers, Black notes that those seasonal workers may get minimum instruction on what to do with more emphasis placed on how to market additional, costlier services.
He thinks it makes little sense for the state to license, say, hairdressers but not tax preparers, particularly in light of the findings of a U.S. Government Accountability Office study in 2006. That study showed that 86 percent of tax returns filed inOregonby commercial tax preparers were in error. That led Oregon to pass a law that set up a state board to oversee paid tax preparers, who had to pass a proficiency test and attend continuing education classes to be licensed.
Black and his colleagues are working with legislators to sponsor a similar bill for Alabama.
He also wants to get the message to folks in meager circumstances that they have an alternative to dealing with commercial tax preparers.
Impact Alabama, a nonprofit group Black founded, helps working families, with children, who earn less than $42,000 a year get free help preparing their taxes. The tax credit refunds amount, on average, to some $2,300. Here, University of Alabama in Huntsville students, who have been trained, work in teams of two to offer free help to eligible families.
And by not paying for the “refund anticipation loans,” the taxpayers don’t incur that cost and have to wait only about a week longer to get their money.
(The free tax help begins Tuesday at Huntsville’s United Way office, 701 Andrew Jackson Way. For an appointment, call 1-888-99-TAX-AL.)
Progressive move
Eligible families obviously would be making a smart decision to seek ImpactAlabama’s help. And legislators would be making a good public policy decision to embrace and approve the bill Black and his associates will propose for the new session that begins next month.
Lobbyists for the tax-preparation industry are sure to fight the proposal, but can potential clients really afford to risk putting their tax returns in the hands of preparers whose competence and allegiance to them is uncertain?
Black’s bill, which would see Alabama join three other states that have approved this progressive move, is in the best interest of consumers. It merits support.
By David Prather, for the editorial board. E-mail: david.prather@htimes.com
