IRS Cracking Down on Tax Preparers

The IRS has unveiled plans to regulate America's tax-preparation industry for the first time. Independent tax preparers and employees of tax-preparation firms will be required to register, pass a competency exam, and take 15 hours of classes a year. The move follows an IRS study that found many of the 87 million Americans who use tax preparation services or software need better protection from unscrupulous tax preparers.

The tougher oversight—aimed mainly at small operations—is broadly welcomed by the industry. "We want to make this into a profession, not just a part-time thing you set up on the kitchen table for six weeks during the tax season," one tax preparer tells the Wall Street Journal. "The good people have nothing to fear; it's the charlatans who hopefully will be rousted out." (More Internal Revenue Service stories.)