DC Circuit Upholds Ruling That IRS Cannot Regulate Tax-return Preparers


The US Court of Appeals for the District of Columbia Circuit recently held that the Internal Revenue Service did not have the statutory authority to regulate tax-return preparers.

In 2011, the IRS issued new regulations that, among other things, required paid tax-return preparers to pass a certification exam, pay annual fees and complete fifteen hours of continuing education each year. The IRS relied on 31 USC § 330 as its authority for the new regulations, which authorizes the IRS to “regulate the practice of representatives of persons before the Department of the Treasury.” The District Court ruled against the IRS and in favor of three independent tax-return preparers who challenged the new regulations as exceeding the agency’s authority. The IRS appealed. 

The court of appeals held that the regulation exceeded the IRS’s statutory authority. Among other reasons, the court found that tax-return preparers did not “represent” the taxpayer before the Treasury because the tax-return preparers do not act as agents with legal authority to act on behalf of their clients. Further, the court found that tax-return preparers do not “practice before the Treasury,” which describes an appearance in an adversarial or adjudicative process, not merely the preparation of tax returns. Accordingly, the court of appeals affirmed, enjoining the enforcement of these regulations. 

Loving v. Internal Revenue Service, et al., No. 13-5061 (D.C. Cir. Feb. 11, 2014).

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Katten Muchin Rosenman LLP | Attorney Advertising

Written by:


Katten Muchin Rosenman LLP on:

JD Supra Readers' Choice 2016 Awards
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.