Self-Preservation: IRS

"When we quit thinking primarily about ourselves and our own self-preservation, we undergo a truly heroic transformation of consciousness." ~ Joseph Campbell

Defending every claim in tax return is the single most important skill for any tax preparer. This is why many accounting firms outsource the substantiation of R&D Tax Credit claims to firms like mine. But how do you know if the people preparing your taxes are reputable? How do you know they are able to perform what counts most? You don't.

That is why I think the IRS should rate tax preparers according to audit results. Crazy, I think not. I have been bouncing this idea off of people for the better part of a year now and the only objection to it that I hear is that this might create some liability for the IRS. My retort is there are already government agencies that rate companies on some metric. Most notably the Occupational Safety & Health Administration

OSHA publishes the safety ratings of almost any type of company you can think of. And if you think those safety ratings are insignificant you are wrong. Those safety ratings add another metric used to determine contract awards.

I am not going to try and spell out how the rating system would work in this simple blog; but, I think the key is to rate the tax preparer according to a simple scalable rating system on audit results.

If we the taxpayers could see a tax preparer's standing with the IRS, we would be a better educated consumer. This in turn would cause the tax preparers that play "audit lottery" with the IRS to be held more accountable than to just the company that they failed. In turn, fewer taxpayers would use those preparers in poor standing.

With fewer incorrect claims being filed tax revenue would likely increase. The increase in tax return accuracy would allow the government to downsize the number of IRS auditors. This is why I don't think the IRS would suggest such a system, Self-Preservation. Essentially, if there are more bad tax filings then there is more work for the IRS. More work for the IRS means job security. (Maybe this is why the tax code is so confusing to. Joking! sort of)

This is a general theme I see with the government agencies. Always expand rather than contract with improved efficiency. For those of you that think this is crazy or impossible give me your thoughts in the comment section below. Maybe it will ease my frustration or maybe I will light a fire under you to want a similar system. Either way it is progress.

PS

This self preservation theme is seen in other government agencies but there is one other that bothers me recently. The Department of Defense and their contracting officers. I will follow with that in the following days.