IRS to Refund Tax Preparers for Canceled Certification Tests

By Jason Bramwell

The IRS announced on May 16 that it's issuing refunds to tax return preparers who registered for certification tests that were canceled due to a court-ordered injunction in late March. Additionally, fees collected from tax preparers who tested on or after January 18, the date the tests were enjoined, are also being refunded.
 
According to the statement, e-mail notifications will be sent to those receiving refunds, and a credit for the test fee will automatically be made to the account used to pay the fee. The IRS anticipates that all refunds will be processed by July 19.
 
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, suspended mandatory testing and continuing education of all tax preparers.
 
The injunction will not affect the regulatory practice requirements for CPAs, attorneys, enrolled agents, enrolled retirement plan agents, or enrolled actuaries, according to the IRS.
 
The court said the IRS had "not satisfied the stringent requirements" to overturn the lower court's ruling, which granted the injunction that put a halt to the IRS Registered Tax Return Preparers (RTRP) program. 
 
RTRP would have required independent tax preparers to obtain a Preparer Tax Identification Number (PTIN), pass a competency test, pay an annual application fee, and complete fifteen hours of continuing education annually. According to the IRS, the effort was aimed at eliminating individuals who are ill-equipped to prepare tax returns.
 
On February 1, the court modified its order, stating that it doesn't affect the requirement for all paid tax preparers to obtain a PTIN, the IRS states. Consistent with this modification, the agency has reopened the online PTIN system.
 
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