rbhelt

It does not go far enough. If the government won't allow the IRS to autoprepare the 90%+ returns that they already have the data for than paid tax preparers should be licensed, whether it is as an Enrolled Agent, CPA, or some newly created tax preparer that cannot represent you before the IRS license. The fact that a company like HR Block or Turbotax can hire someone with no experience, sign them up for a PTIN, teach them how to use turbotax, and then call them an "expert" is insane.

This! I am CPA with a tax practice and it makes me unreasonably angry that the tax prep industrial complex has lobbied our government into making the vast majority of people stress over their tax returns or have to pay someone to prepare a return that is already sitting on an IRS computer. No CPA worth their salt wants to do the simple returns but companies like Intuit and HR Block feed off them.

It is truly insane. Major corporations spent billions to prevent this. The worst part is that for the majority of Americans, the government has already internally prepared their tax return before they even file but again the tax preparation industry spends a fortune lobbying Congress to prevent an automatic filing of taxes.

Fair point, but the actual "tax code" (Title 26 of the US Code) is extremely complex for most people to understand. If he is referring to IRS Form Instructions as the tax code, yes those are usually not very complex. From my perspective K1s, RSUs, & ESPPs are as simple as a W2 with state tax withholding and I think that is why I am struggling with so many of the comments on this post - I simply can't relate.

Additionally, "the tax code isn't /that/ complicated"... tax law is so complex that it is the only form of US law in which ignorance of the law is an acceptable legal defense.

As a veteran tax CPA, I think LLMs can be very good at preparing taxes but I would not trust them to complete a tax return start to finish. An LLM that can take data from tax documents and input that data into the correct boxes of tax preparation software has no need for math, it just has to identify data in a pdf, spreadsheet, or handwritten note and transcribe that data to the correct box in professional tax software that then does the math. In your typical local CPA firm, an LLM could replace the unlicensed preparers/interns/early career stage CPAs in filling out the return for the experienced professional to review and adjust according to their specialized knowledge. As with many industries, I think the LLMs are suited at replacing entry level automated turks but lack the skills necessary to fully complete the project.

I am a CPA with 20+ years of experience and I feel like I need to defend our industry here.

There is no such thing as "failing" an IRS audit. You either under reported income, overstated deductible expenses, or your "accountant" changed the numbers you provided and committed fraud, which would have resulted in immediate legal proceedings by the IRS against the preparer. So did you "fail" because your preparer committed federal tax fraud or did you underreport your income?

The statement that the one time you used an accountant you got audited implies that you are confusing causation with correlation. There are about 6 ways that the IRS selects returns for audit but only 3 are actually relevant here.

- Information Matching (ie. if your W2 does not match the W2 submitted by your employer). This mostly used for your basic W2, 1099DIV, etc. kind of taxpayer and is usually just a letter from the IRS telling you your numbers are wrong and you need to amend your return.

- If they are examining a related return (ie. you own a business and another partner in that business is being audited)

- Computer scoring which breaks down into the Discriminant Function System (DIF), basically, how does your return compare to similar returns, and Unreported Income DIF, what is the potential that your return underreported income. This is what is commonly used for businesses and self employed individuals' Schedule C. Basically, when you prepare a business return (1040 Sch. C, 1041, 1065, 1120, 1120S, or 990) you have to report your business industry's NAICS code, and provide a single line explanation what your business does. Using this and the return data, the IRS is able to score a return on the likelihood that profit is understated by comparing a businesses income and expenses to the norm for a similarly sized businesses in that industry. High scoring returns are then reviewed by IRS personnel.

One of those three things happened to you and none of them are the fault of a preparer that is using accurate information provided by the taxpayer.

Finally, you keep saying things like "accountant". You disparaging an entire industry without saying what type of tax preparer you used. Was it a CPA, licensed by a state with experience in tax? An Enrolled Agent, licensed by the IRS directly? Or a tax preparer, an unlicensed person preparing your return either on their own or through something like HR Block or Turbotax? Because if you used an unlicensed tax preparer and are blaming licensed individuals that is like hiring an unlicensed electricians and then when your house burns down from an electrical fire, turning around and saying all electricians are bad