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The Daily

AICPA Given Go-Ahead on Suit Against IRS Over Tax Registration Program

Chris Gaetano
Published Date:
Nov 4, 2015
GavelThe AICPA has been given permission by an appeals court to pursue a previously-dismissed lawsuit against the IRS over its voluntary tax preparer registration program, according to Forbes. The IRS program allows uncredentialed preparers to be recognized by the service as Registered Return Preparers, provided they complete 18 hours of continuing professional education, have an active PTIN, and agree to adhere to the professional guidelines outlined in Circular 230. The IRS announced its launch in June 2014, two years after the court case Loving vs. IRS shut down a previous program that functioned more or less the same way save for the fact it was mandatory. The judge in that case said that the IRS didn't have the authority to regulate tax preparers, and so could not implement the program that had been in development since 2010. 

Prior to the suit, the AICPA, in a letter, said that the voluntary IRS program represents an unacceptable end run around the court decision and that the service still does not have the statutory authority to implement it even in this form. Further, it added that the program is voluntary in name only, as there will be significant pressure for preparers to participate in it. When the IRS went ahead with the program anyway, the AICPA filed suit. 

However, the same judge who had previously shut down the mandatory IRS program denied that the AICPA had appropriate standing to bring the suit, feeling it did not bring evidence that, through the program, it had suffered any sort of injury. But, a decision from an appeals court said that it did have standing, as the program could potentially harm AICPA members through increased competition. 

As a result, the lawsuit can now proceed against the IRS. Though, depending on how quickly proposed legislation from the Senate Finance Committee is processed, it may actually all be a moot point: the bill would give the IRS explicit authority to regulate tax return preparers, giving it statutory backing to create the mandatory program in its entirety.