TIGTA report criticizes IRS Preparer Visitation Project

Jul 19, 2012

The IRS project to assess the services of tax return preparers by visiting them around the country has been correctly implemented, but its effectiveness remains to be determined.

That is the principal finding of a report released this week by the Treasury Inspector General for Tax Administration (TIGTA) concerning the IRS’s Return Preparer Visitation Project (RPVP).

The overall objective of the project was to evaluate the effectiveness of the IRS’s efforts to conduct visitations to paid preparers to improve the accuracy and quality of filed tax returns.

TIGTA evaluated the methodology used to select paid preparers and determined that those visited might not have benefited the most from an educational visit. Based on survey responses by the preparers, several paid preparers remarked that the use of IRS resources to visit their office was wasteful because their continuing professional education requirements were much more extensive than the information presented by the revenue agents. TIGTA also determined that the RPVP did not have performance measures or tracking procedures to successfully evaluate its effectiveness.

TIGTA recommended that the IRS ensure that the RPVP uses data-driven selection criteria to specifically identify paid preparers who filed tax returns with errors to make certain the most egregious paid preparers are receiving educational and enforcement visitations.

In addition, the IRS should develop specific performance measures and internal controls that can be used to assess the impact of the RPVP on the paid preparer community. This effort should include a process to monitor and track the behavior of paid preparers visited to determine whether the quality and accuracy of tax returns improved.

In their response to the report, IRS officials agreed with both recommendations and stated they have already begun their implementation.