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...

Federal judge tosses IRS lawsuitsBernie Becker of The Hill reported that a federal judge sided with the IRS on Thursday, tossing out two lawsuits filed against the tax agency over its improper scrutiny of Tea Party groups...
Amidst the dark clouds hovering over the IRS this year—ranging from the lingering Tea Party scandal to other improprieties to damaging budget cuts—at least there's a ray of sunshine in a new report from the...
SEC, Big Four Chinese affiliates make progress in talks over audit documentsMichael Rapoport of the Wall Street Journal reported that the US Securities and Exchange Commission (SEC) and the Chinese affiliates of the Big Four...

Already a member? log in here.

Upcoming CPE Webinars

Oct 30Many Excel users have a love-hate relationship with workbook links.
Nov 5Join CPA thought leader and peer reviewer Rob Cameron and learn ways to improve the outcome of your peer reviews while maximizing the value of your engagement workflow.
Nov 12This webcast presents basic principles of revenue recognition, including new ASU 2014-09 for the contract method. Also, CPAs in industries who want a refresher on revenue accounting standards will benefit.
Nov 18In this session Excel expert David Ringstrom, CPA tackles what to do when bad things happen to good spreadsheets.