A quick timeout from tax returns!
Today the D.C. Circuit Court of Appeals handed the IRS a setback. In a unanimous decision it rejected the IRS’s appeal of the Loving decision.
Back in 2010, the IRS set up tax preparer licensing regulations. Besides requiring an annual renewal of the PTIN (Preparer Tax Identification Number), the IRS was requiring that all tax preparers pass a test and take 15 hours of continuing education hours each year. This would give them the RTRP designation. Enrolled Agents, CPAs and tax attorneys were exempt from the regulations because they are already regulated. The Institute for Justice filed suit against the IRS on the behalf of three small tax preparers. January 18, 2013 the District Court for D.C. agreed with the Institute for Justice and granted them a permanent injunction preventing the IRS implementing the RTRP program. The Court said that the IRS did not have the authority to require regulation.
Of course, the IRS appealed the decision to the D.C. Circuit Court of Appeals. Today, that court ruled with the Institute of Justice and their clients that the IRS doesn’t have the authority to regulate tax preparers. That regulation has to come from Congress.
What will happen now? I don’t know if there can be any more appeals (not a lawyer) but I bet there will be a tax preparer bill in Congress soon.
Back to returns!