Doug Shulman, ex-Com’r, and Dave Williams, ex-Chief of OPR, may have bent 31 USC §330 far out of shape; Judge Boasberg, and later DC Cir, may have been right in rapping Doug and Dave on the cliché. All that said, the unenrolled, unregistered, unregulated paid preparers are a continuing menace to the tax system.

Follow me, if you will, to today’s case in point: Clarence J. Mathews, 2021 T. C. Memo. 28, filed 3/9/21. CJ says he’s an employee truck driver who commutes 75 miles to work. The Reverend J.H. Reynolds, pastor of Beulah Missionary Baptist Church, says CJ is a minister thereof, but unpaid, so no W-2.

Notwithstanding the foregoing, CJ’s return, prepared by his paid preparer, had a Sched C describing CJ as “Minister” of “Beulah Missionary BA,” with income and expenses generating a $20K loss, but no SE. CJ gets a SNOD at no extra cost.

On the trial, “…petitioner testified that his preparer should not have filed a Schedule C. At trial petitioner did not know what a Schedule C was or whether he had any responsibilities or requirements in relation to the Schedule C, and he asked how the Schedule C affected his job as a truck driver. He testified that the preparer should have reported only his ‘regular’, or wage, income and the pension amount.” 2021 T. C. Memo. 28, at p. 4.

Of course, CJ has no substantiation for the rest of the paid preparer’s fiction, and candidly testifies that the vehicular deductions are commuting expenses.

Judge Wells disallows IRS’ assertion of SE, as CJ wasn’t self-employed, and Rule 155s the rest.

IRS couldn’t find a Section 6751(b) Boss Hoss signoff for the accuracy chop, although if IRS had one, it would be a slam dunk.

I wonder if the paid preparer got a piece of any refund, or even maybe cashed the refund check, took the cut, and gave CJ the rest.

Please don’t think I’m piling on to CJ. He isn’t the heavy here, and his story is legion.

Paid tax preparation, aside from us Circular 230 types, the very few States that regulate, and the realm of the big chains, is America’s Alsatia, where the king’s writ doth not run, a land where imagination rules and fact is always the first casualty, a free-fire enclave in The Twilight Zone.