Paul L. Caron

Saturday, January 19, 2013

Court Says IRS Lacks Authority to Regulate Tax Preparers

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.

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I just want my $63 annual filing fee refunded.

Posted by: Woody | Jan 21, 2013 7:14:16 PM

Now we just need someone to bring a class-action suit challenging the constitutionality of America's immoral citizenship-based taxation system and the IRS's FATCA jihaad against seven-million so-called U.S. Persons worldwide. This will be one of the biggest tax stories of the year as the FATCA monstrosity lurches on to the tracks.

Posted by: Deckard1138 | Jan 21, 2013 5:22:39 AM

I would anticipate that an appeal will take place or there will be congressional action to grant the department the necessary authority.

Posted by: Cla | Jan 20, 2013 7:26:32 AM

Wasn't the IRS planning to abandon this project as a miserable failure anyway?

Posted by: AMTbuff | Jan 19, 2013 2:43:26 PM

Less than three weeks into the year and we already have one of the top five judicial tax decisions of 2013.

The stories give credit to the Institute for Justice. But none of them give credit to the Koch brothers, who provided the initial funding for the Institute.

Posted by: Bob | Jan 19, 2013 10:13:47 AM