[fabsroman]

There are only three professionals that can represent you in front of the IRS. Those would be an attorney, a CPA, or an enrolled agent. An enrolled agent is somebody that passes the IRS's exam for tax preparation.

Mind you, any John Doe can prepare tax returns. That is, H&R Block can pick a bum off the street and have him preparing your tax returns tomorrow. Tax preparers are not required to pass any type of certification; however, the IRS is thinking about making an exam mandatory for new tax preparers.

On a side note, 5 Jackson Hewitt offices are being prosecuted by the Justice Department for preparing fraudulent tax returns. Also, from some new clients of mine I have heard that H&R Block is not deducting the same items this year as they did last year. One example is a car salesman client of mine. Last year, he complained to me that all of his coworkers were deducting their dry cleaning and suits through H&R Block, and I told him that the only way they could do that is if the clothing could not be used in normal daily activity outside of work (e.g., mechanic coveralls with the mechanic's name and shop logo, fireman's uniform, police uniform, etc). He responded that he only wears his suits to work and never uses them for anything else. My response was "Not Deductible" because they can and are normally worn for things other than work, and the standard isn't whether the taxpayer uses the clothing outside of work, but whether the clothing could be used outside of work. Well, this year H&R Block told all of his coworkers that they would not deduct the suits or dry cleaning this year. I had a LEO come to me this year that wanted to deduct haircuts and the cost of razor blades because his employer required him to be clean cut. Yeah, right. If that were the case everybody and their mother would be deducting all that stuff. His old preparer deducted that stuff for him and she also deducted the mileage for him to drive to and from work because the county did not give him a patrol car to take home since he lived outside of the county and she just didn't think it was fair. That preparer is none of the three above, and I know it because I looked her up. If she knew the law, she would know that the use of a patrol car is not considered income to the employee, and not included on the LEO's W-2 because it is being given to the LEO for the convenience of the employer (i.e., the employer has a police presence in the county whenever the LEO is driving around in the car). The guy wanted to deduct meals too, but there is specific case law pertaining to that too, and it is only allowed when the employer requires the LEO to eat at a specific place for the employer's convenience.

As far as I am concerned, the IRS should audit everybodys returns once every 5 years and require everybody to provide documentation for their deductions. Anything that cannot be documented should be dissallowed and charged interest and penalties. That should get rid of most of the $230 Billion tax gap between what people should pay and what they actually pay.

I also think Congress should do away with charitable deductions unless the deduction is greater than $500 and the taxpayer has proof.

Anyway, to answer your question, CPA's in Maryland are required to take 40 hours of Continuing Professional Education ("CPE") and I usually take most of it in tax prep. I also belong to a bunch of societies that send me newsletters about tax news. bookkeepers do not have this requirement. In the end, I would not recommend that somebody have their tax returns prepared by a bookkeeper over a CPA.

Maybe, just maybe, your mother in-law misunderstood them. CPA's are usually horrible at bookkeeping, so in some circumstances it is better to use a bookkeeper than a CPA to maintain your books. Me, I only do Quickbooks and Microsoft bookkeeping. If somebody is using a different system, I don't do it.