IRS Regulation Of Tax Return Preparers Is Dead (For Now)


In 2011, the IRS sought to regulate tax return preparers, and issued regulations that required “registered tax return preparers” to pass a competency test, a tax compliance check, and a suitability check. They would also have to complete 15 hours of continuing education each year.

In 2014, the Court of Appeals for the District of Columbia found that no authority had been granted to the IRS by law to impose such regulations. The time for an appeal to the U.S. Supreme Court has passed, so these regulations are now a dead letter. Congress may yet act in the future to grant authority to the IRS to regulate preparers.

Most of us are aware of the benefits of regulation. The Institute for Justice reminds us of some of the negatives, including (a) the forcing out of the market of longtime, trusted tax preparers by the out-of-pocket costs and opportunity costs imposed by the regulations, and (b) higher tax preparation costs to consumers as the regulatory costs imposed on preparers are passed on. The Institute notes that most, if not all, of the benefits of mandatory regulation can be obtained through a VOLUNTARY certification program, without unnecessarily imposing costs on those who don’t value the certification or license.


Topics:  Appeals, IRS, Regulation, Tax Preparers

Published In: Tax Updates

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.

© Charles (Chuck) Rubin, Gutter Chaves Josepher Rubin Forman Fleisher P.A. | Attorney Advertising

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