With Tax Day almost upon us, many Americans are turning to paid tax preparers to help them file their returns. When we visit a tax professional, it's natural to expect that our returns are in good hands. Yet over half of paid preparers are not required to meet basic competency standards at the federal level, leading to inaccuracies on tax returns that ultimately harm filers. This is especially problematic for low-income households, for whom tax credits like the Earned Income Tax Credit (EITC) make up a sizeable portion of their annual income.

The recent expansions of the EITC and Child Tax Credit (CTC)—the latter of which can reduce child poverty by 45%—highlight the importance of making sure that working families get proper access to the tax credits they're entitled to. Fortunately, President Biden's American Families Plan calls for giving the Internal Revenue Service (IRS) the authority to regulate paid tax preparers. If put into law, this would be a much-needed step towards reducing errors or outright fraud on tax returns. The Plan also calls for strengthening the IRS and giving it more resources, which the agency needs.

Enrolled tax preparers—like certified public accountants and attorneys—are certified by the IRS. But most preparers are unenrolled and therefore not required by the IRS to demonstrate competency in tax preparation. Among EITC claims made by paid preparers, most are filed by unregulated preparers. This has resulted in high error rates that contribute to the mistaken perception of EITC claimants committing fraud. Errors such as these can be costly to taxpayers, resulting in penalties or missed tax benefits.

On the other hand, the Volunteer Income Tax Assistance (VITA) program has an excellent record of accuracy in preparing tax returns. VITA programs are required to adhere to strict federal standards, and VITA volunteers are certified annually through an IRS exam. As a result, VITA sites have a 94% accuracy rate—one of the highest in the industry—demonstrating that having basic competency standards for preparers can reduce tax preparation errors.

In 2011, the IRS issued regulations that would have required paid tax preparers to register with the agency, take competency exams and engage in continuing education. However, these rules were struck down in 2013 by the courts, which decreed that the IRS would need clear legislative authority to regulate paid preparers. While regulation is not authorized at the federal level, states have the power to do it within their own borders—yet 43 states and the District of Columbia have no regulations in place.

The proposal to allow the IRS to regulate paid preparers in the American Families Plan is a great first step. But to eventually create effective regulation, we first need to ensure that this authority is included in the final version of the legislation. Please call your members of Congress and ask them to support retaining the paid preparer language in any final bill. Now more than ever, working families need the assurance that their tax returns are in good hands—and that they'll receive the tax benefits that can help lift them out of poverty.