Friday, November 27, 2015

Something I Wrote

People keep asking me how, with my education in education and librarianship, how I can be happy doing my work in bookkeeping and tax preparation. Some of below are notes and thoughts. Nothing is coherent. It is unedited and not finished. It is written more for someone unfamiliar with the tax profession than for a tax pro.

At first glance, the worlds of librarianship and taxation do not seem to align. Taxation seems more at home in the fields of accounting and business management; librarianship, as more of a meta field, can skim through these worlds without thoroughly inhabiting them. Librarianship must be able to take a kind of literacy and apply it across disciplines. Enrolled agents, as tax specialists, must completely live within that world and its cultures. We may think of them as different tribes. Librarianship is anthropology which studies and applies; taxation is but one tribe that it studies.

These metaskills are what make librarians so adept at becoming engrossed in whatever world captures their attention. And taxation is more closely aligned to librarianship than previously imagined. Both rely on research with an emphasis on reliable resources and mounting convincing arguments. To clarify the definitions: a librarian in this work is someone with a Master of Library and Information Science or Master of Library Science degree, in addition to her prior undergraduate degree.. Librarians work with different institutions including academia, public libraries, school libraries, and special libraries, like law and healthcare. For the most part, I am thinking about reference and instruction librarians in this piece, although catalogers would also probably work since taxonomy does exist in taxation.

An enrolled agent is a participant in the IRS program which offers an individual unlimited representation rights before the agency.  EAs are codified in Title 31 of the US code, which makes them a part of US Department of Treasury but administered by the IRS. To become an EA, one needs to either have worked for the IRS for a certain number of years or pass 3 comprehensive exams on different parts of the tax code. An EA is federally licensed and is different from a CPA in that her specialty is taxation and tax law. A CPA often is involved with all aspects of accounting. A CPA has more of a broad approach while an EA is a subject specialist.

EAs and librarians both have strict codes of ethics. EAs are bound by Treasury Circular 230 and includes sections on protecting taxpayer privacy. Librarians have ethics laid out by various regulatory agencies, including the American Library Association, which also involve protecting patron privacy and access to materials. In these areas, both groups are bound by law to protect the client and to ensure professional standards are met. In a practical application, librarianship is expected to grow as a profession much more slowly than any other field. Their wages have become stagnant and in light of tightening budgets in the public arena, many libraries are closing doors or reducing hours. Many academic librarians are being converted more into computer labs and requiring an information technology approach.

Conversely, EAs are expected to grow as a field, can be self-employed or work within small or large organizations, and as the tax code becomes more complex, can expect steady employment. Many EAs also choose to only work during the tax season. Statistically, the average salary for a librarian is 54k a year while an EA is about 70k (both of these vastly depend on location, setting, and experience).

But this is a story about what joins these two together thematically rather than on the surface level. Tax professionals, like librarians, must muster what ACRL has labelled the 5 elements of information literacy--know your question, be able to research it, evaluate your finds, synthesize it, and cite it. Completing taxes and representing taxpayers is a combination of surface knowledge and analytical skills with a reliance on research. If a tax pro cannot master research skills, her arguments will often be left wanting and she will find herself taking dangerous positions on a tax return (think of each line in the tax return as telling a story about a year in the life of the taxpayer).

If completing a tax return were easy, anyone could do it. Just take some numbers and plop them into the correct line. But each line, each number tells us a different piece of information. And it is more than just looking at the numbers. It is knowing what to do with them and what questions to ask about them. A HUD-1 may tell you a house was sold but each line has a different tax consequence and an EA must know enough how to get there to calculate if a taxpayer has a gain or loss from a rental property sale.

 If representing a taxpayer in front of the IRS was simple, anyone could do it. And in fact some taxpayers do choose to represent themselves and if they are lucky, their audits are straightforward enough that they don’t need representation. Unfortunately, not all examinations (IRS’ preferred nomenclature) are easy and often require an EA to step in. EA’s experience, research and knowledge allow them to define the scope of the examination, research the laws and cases, and present a precise and clear argument with evidence to IRS.

 The most pressing difference to an outside observer would be the educational component of librarianship is often lacking in a tax professional’s office. This isn’t necessarily true. Often, an EA or CPA, when confronted with a taxpayer stating things such as--”my barber said I could deduct my lipstick as I act part time” or “all my mileage is deductible if I put a sticker on my car”--will take the time to explain the regulations and will point out where in IRS publications they can find more information and, if requested, the actual law in the US Code.