The American Institute of Certified Public Accountants Oct. 8 faced tough questioning from Internal Revenue Service officials at a hearing on proposed rules (REG-138637-07) that would incorporate unenrolled tax preparers into Circular 230.

An AICPA representative was one of a dozen speakers who made their case for various revisions to the service’s proposed plan for regulating tax preparers by requiring them to register with the IRS and undergo testing in many cases. During the hearing, IRS officials raised concerns that AICPA’s recommendation that IRS exempt certain tax preparers from registration and testing requirements might make it harder for IRS to police offshore tax preparers.

AICPA is seeking an exemption from the requirement that all preparers who prepare all or substantially all of a tax return for a fee obtain a preparer tax identification number (PTIN) and register with the IRS, and that many be tested and receive continuing education.

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