more than a decade. >> i started out as an unenrolled return preparer.1975, i hung up a shipping he will and i started preparing returns. i had no experience whatsoever. i bought a textbook on accounting, and i read the irs rules and the publications. today, with the advent of software, it's brought in all sorts of people. and they just plug in numbers with the return, and they don't know anything about the tax law. >> and for taxpayers, going to the wrong preparer can be a costly mistake. >> i went shopping around and found this place, just walk-in. >> reporter: sharon chance is a 42-year-old student in philadelphia. last year, she says a preparer at a store front tax service told her she could claim her god children for an estimated refund of $1100. >> she said all we need is their insurance cards, medical cards and did all that. >> reporter: but they're not your children. >> right. exactly. exactly. and she said, well, does that help take care of them part of the year. and i said yes, i did. financially. but that was that. it wasn't like they were liv

offer unenrolled return preparers the opportunity to have a voluntary certificate. ofond, restrict the ability preparers to represent taxpayers unless they earn the certificate. mount a consumer protection campaign that educates taxpayers. reminds taxpayers to obtain a copy of their tax return with the preparer's signature. ae iris should develop database to include all preparers that register with the irs. the vest and enforcement -- best enforcement is to have an informed and educated consumer face. in this instance, taxpayers. the clear-cut ways to do -- understand which preparers meet levels of competency and which are not willing to make the effort. that is why having a mandatory designation along with cpas and attorneys is so important. it it is a line that the taxpayers can understand. >> missiles and, thank you. olson, thank you. you are the national taxpayer advocate. it is your job to go to bat for the kind of people we are seeing getting sleaze -- fleeced. i would like to -- you to amplify on the new incentives and opportunities for the unscrupulous taxpa

chairman, when you catch an unenrolled preparer, in a fraud, under the loving decision you don't have any standing to do anything to that person but can you refer them to the justice department for prosecution or investigation? >> and we do that. whenever we find either systemic fraud or fraud a violation. law we can refer for prosecution. as taxpayer advocate noted that is at fact after the taxpayer has been abused. we can't prosecute, we don't have resources to catch everybody who fraudulently defrauded their clients or prosecute them all. but they are at risk. if they commit fraud in filing of their returns for their clients, they violate the law, they're at risk for prosecution, the question is, whether we can catch enough of them to make a difference. >> well cms does a good job of trying to enforce against fraud in medicare and medicaid by making highly visible profiles of anybody they catch defrauding the government, might be the same thing, might be beneficial for the irs as well. >> we give as much ability for the prosecution we get and for the sentences we get but there is s

second, restrict unenrolled prepares to represent taxpayers in audits of return for they prepare, unless they earn that certificate. and third, not the consumer protection campaign that and remind them to obtain a copy of your tax return with the preparer signature on it. finally, the irs should develop a publicly accessible and searchable he prepared database to include all those who register with the irs. after all, the best enforcement and consumer protection strategy is to have an informed and educated consumer base. in this instance, taxpayers who need to have clear-cut way of knowing which prepares me minimum levels of competency and which are not willing to make the effort. and it is a bright line that taxpayers can understand. thank you. >> meselson, thank you. colleagues, we've all take five minutes at this point. ms. olson, if i could start with you first, you are the national taxpayer advocate. it is your job around the country. i was particularly struck and would like you to amplify a bet on that. you said that there are new incentives and new opportunities for the unscrupulo

"the new york times" reports, that a common thread running through stories of unenrolled is cost. many do not qualify for federal subsidies or believe the assistance is not enough to make the insurance affordable. some of those chose not to sign up were motivated by idealogical reasons. a "new york times/cbs news poll" of uninsured people in november, those who planned not to get coverage have said cost was the main reason. yet it is being foisted upon us, whether we want it or not. >> it ended up being a lot more expensive than people thought. you mentioned subsidies which something people talked about before. you get up to 50% subsidies. you have various percentage of subsidies to help you pay for it. a lot of people are not eligible for higher percentages. they are at not eligible for 3 or 4, 5%. when you're paying $300 a month that doesn't put a big dent. jon: people who only signedd one in for a surprise. >> that is theoretically what you're paying, could be percentage of your income or higher. typically till will be higher. question in terms of penalties is the irs, how are

but when it comes to these folks who are these unenrolled preparers, folks who just need to get an i.dtually more of them. so they're professional only to the extent that you have to pay them to do it? >> this is the majority of tax preparation around the country that serves working class americans, working paycheck to paycheck. it's literally like the wild west. people use the word reg lagts and commercial tax preparers say this will be bad for our business. it literally will not be. regulation really isn't the best word. the best word is just basic licensing and training the way if you want to open a hair salon in any state in the country, you have to pass a test and get a license. if you want to do nails, you have to pass a test and get a license. if you want to prepare taxes for families charging them on average $300 for 30 minutes of work that's not very difficult, signing the most important document they sign all year, there's no training requirement, there's no licensing. it's literally the wild west in every state other than four. >> so you're talking about $300 and $400 fees f

first, offer unenrolled return preparers the opportunity to earn a voluntary examination and continuing education certificate. second, restricted the ability of underworld prepares to represent taxpayers in audits of returns they prepared unless they earn that certificate. third, mount a consumer protection campaign that educates taxpayers about the need to select prepares who can demonstrate competency and reminds taxpayers to obtain a copy of their tax return with the prepares signature on a. finally, the irs should develop a publicly accessible and searchable prepare database to include all prepares to register with the irs. after all, the best enforcement and consumer protection strategy is to have an informed and educated consumer base. in this instance, taxpayers. who need to have some clear-cut way of knowing which content meet minimum level of competency and which are not willing to make the effort. that is why having a mandatory certified prepare designation along with enrolled agency p.a. and attorney, is so important. it is a bright line that taxpayers can understand. thank y