Can government regulations cause unemployment? Here's an example of where they probably will.
Test-taking anxiety looms for tax return preparers reports that only 6% of the nation's 340,000 have taken the IRS proficiency exam that will be required of all preparers after December 31, 2013. That means up to 320,000 will be unemployed in 2014 if they don't take the test.
The stated objective of qualification test is to ensure tax preparers have sufficient skills and to better prevent fraud. Non-exempt (those that are not CPAs, lawyers, and enrolled agents) preparers will be required to take the test. The article notes that many part time tax preparers are older "math whizzes" interested in the part time cash but not the registration test required after 2013. Instead, they will choose be no longer employed as a tax preparer, rather than take the test.
For reference, I don't disagree with the need to weed out poor preparers or to reduce fraud. However, there is a process already in place with PTIN (Preparer Tax Identification Number) process which costs $64.25 to renew each year. The PTIN is linked to a preparer's SSN. Also the IRS will be able to identify which PTINs file incorrect or fraudulent returns. So the IRS already can use the PTIN system to weed out poor preparers and reduce fraud, with a few simple additional steps.
Even though I am not in my 70s and 80s referred to in the article, I will likely choose to stop working, rather than invest time studying and paying the $116 testing fee. Dealing with more government regulation is not worth it for a job that pays a little above minimum wage.
For more on New Realities, check back every Sunday for a new segment.
This is not financial advice. Please consult a professional advisor.
- Copyright © 2012 Achievement Catalyst, LLC