'More likely than not' causes tax preparer distress.

The AICPA is urging Congress to modify a provision it approved that has resulted in a fundamental change in the role of tax return preparers and, according to the AICPA, will cause an increase in preparer fees for taxpayers. The provision is included in the Iraq war-funding bill that became law in May.

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The AICPA emphasizes that the new law's requirement to increase the tax return reporting standards applicable to tax return preparers for undisclosed non-tax shelter items from the "realistic possibility of success" standard to the "more likely than not" standard is a major change in tax policy.

Preparers, to protect themselves from penalties, may feel they must ask their clients to include disclosures for virtually every item on their tax returns for which there is the slightest uncertainty regarding the proper treatment, according to the AICPA, and such excessive disclosures would defeat the purpose of the disclosure system and undermine the electronic filing initiative, which is not capable of processing a large number of disclosures in a return.

The AICPA is recommending that Congress equalize the tax return reporting standards for preparers with the standards applicable to taxpayers.

For more information, visit http://aicpa.org/download/news/2007/AICPA_Urges_Congress_to_Modify_More_ Likely_Than_Not_Provision.pdf.

dodging Uncle Sam: Nearly 55,000 exempt organizations had almost $1 billion in unpaid federal taxes as of Sept. 30, 2006. - Government Accountability Office