Court Denies IRS Appeal to Lift Injunction on Tax Preparer Licensing

By Frank Byrt

On March 27, a federal appeals court refused to lift an injunction issued January 18 by a lower court against the IRS' effort to license tax preparers. The ruling, made by the US Court of Appeals District of Columbia Circuit, means that the IRS' requirements for mandatory testing and continuing education of all tax preparers remain suspended. 
 
The court said the IRS had "not satisfied the stringent requirements" to overturn a lower court's ruling in January, which granted the injunction that put a halt to the IRS program.
 
A federal judge in February affirmed the earlier injunction to stop the testing and education portion of the IRS' return preparer regulatory program.
 
The rules were part of the IRS' first attempt to regulate the tax return preparation industry through the Registered Tax Return Preparers (RTRP) program, which would require that independent tax preparers obtain a Preparer Tax Identification Number (PTIN), pass a competency test, pay an annual application fee, and complete fifteen hours of continuing education annually. 
 
The IRS effort is aimed at eliminating what it sees as individuals ill-equipped for the tax preparation industry.
 
Return preparers who do not have professional licenses still need to register with the IRS.
 
"This ruling protects the rights of our clients and hundreds of thousands of tax return preparers to continue earning an honest living while this case is on appeal," said Scott Bullock, an attorney for the Institute for Justice, in a March 27 press release. "The IRS claimed that the sky would fall if the injunction remained, but both the district court and the appeals court saw through that rhetoric." The Institute of Justice is representing three independent tax preparers who challenged the regulations.
 
"We will continue to fight the IRS' unlawful power grab on appeal," said Institute for Justice Attorney Dan Alban. "Congress never gave the IRS the authority to license tax preparers, and the IRS can't give itself that power."
 
The IRS has not yet issued a statement on whether or not it will appeal the latest ruling in the case.
 
Related articles: 
 

You may like these other stories...

The IRS has announced the special per diem rates for 2014-15 that taxpayers can use for substantiating the amount of ordinary and necessary business expenses incurred while traveling away from home. The new per diem rates...
The issue of international assignees was, for a long time, limited to a small number of companies – meaning only those that operated on an international scale. But in recent years, global expansion has shifted into...
Exclusive: Lois Lerner breaks silenceIn her first press interview since the IRS Tea Party targeting scandal broke 16 months ago, ex-agency official Lois Lerner told Politico that employers won’t hire her, she’s...

Already a member? log in here.

Upcoming CPE Webinars

Sep 24
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.
Sep 30
This webcast will include discussions of important issues in SSARS No. 19 and the current status of proposed changes by the Accounting and Review Services Committee in these statements.
Oct 21
Kristen Rampe will share how to speak and write more effectively by understanding your own and your audience's communication style.
Oct 23
Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.