Saturday, January 19, 2013
Loving v. United States, No. 12-385 (D.C. D.C. Jan. 18, 2013):
To close a gap in the federal oversight of tax professionals, in 2011 the IRS began regulating hundreds of thousands of non-attorney, non-CPA tax-return preparers who prepare and file tax returns for compensation. The new regulations require each such preparer to pass a qualifying exam, pay an annual application fee, and take fifteen hours of continuing-education courses each year. Agency action, however, requires statutory authority. The IRS interpreted an 1884 statute as enabling these new regulations. That statute allows the IRS to regulate “representatives” who “practice” before it. Believing that tax-return preparers are not covered under the statute, and thus cannot be so regulated, Plaintiffs – three independent tax-return preparers – brought this suit. Plaintiffs and the Government have now cross-moved for summary judgment. Concluding that the statute’s text and context unambiguously foreclose the IRS’s interpretation, the Court will grant Plaintiffs’ Motion.
- ABC News, IRS Loses Lawsuit in Fight Against Tax Preparers
- Bloomberg, IRS Lacks Power to License Tax Preparers, Judge Rules
- Forbes, Federal Judge Shoots Down IRS Attempt To Regulate All Paid Tax Preparers
- Reason.com, Mom-and-Pop Tax Prep Firms Defeat IRS!
- Reuters, Court Strikes Down IRS Tax Preparer Regulations
- Tax Update Blog, Court Throws Out IRS Preparer Regulation Scheme!