The Inflation Reduction Act (IRA) President Biden signed into law Aug. 16 has been causing concern among some in the tax prep industry due to the act’s designated funding for studying the feasibility of a Free File-like system for all taxpayers. The concern is that if free filing happens, tax pros will no longer be needed. However, we’re here to tell those concerned tax preparers they can rest easy.
Regardless of whether there is a Free File system in place for all taxpayers, many will still need the assistance of a qualified tax preparer. The Tax Code is extremely complex and the fear of the IRS punishing them for their mistakes results in a great deal of taxpayer anxiety. Many taxpayers also believe that without the assistance of a trained professional, they may pay more tax than is required or miss out on valuable deductions or credits. Taxpayers facing more complicated tax issues, such as those with small businesses, rental activities and investments, will continue to benefit from the expertise of an experienced tax professional who has a keen understanding of the relevant rules and regulations.
Additionally, as the IRS hires the additional agents using the funding provided in the IRA, correspondence between taxpayers and the agency will likely increase. That means it is likely there will be an increased need for tax preparers with the skills needed to represent taxpayers. Enrolled agents, CPAs, attorneys or an Annual Filing Season Program – Record of Completion is typically needed to represent clients before the IRS.
NATP discussed the future of the tax prep industry in the wake of a potential Free File-like system for all taxpayers, and the opportunity for preparers to earn a designation during a live broadcast. Watch the replay below!
About National Association of Tax ProfessionalsThe National Association of Tax Professionals (NATP) is the largest association dedicated to equipping tax professionals with the resources, connections and education they need to provide the highest level of service to their clients. NATP is comprised of over 23,000 leading tax professionals who believe in a superior standard of ethics and exemplify professional excellence. Members rely on NATP to deliver professional connections, content expertise and advocacy that provides them with the support they need to best serve their clients. The organization welcomes all tax professionals in their quest to continually meet the needs of the public, no matter where they are in their careers.
The NATP headquarters is located in Appleton, WI. To learn more, visit www.natptax.com.
Information included in this article is accurate as of the publish date. This post is not reflective of tax law changes or IRS guidance that may have occurred after the date of publishing.