Statement on Court Ruling Related to Return Preparers

Post Date: 2/8/13
Last Updated: 2/8/13


Cross References

On Friday, January 18, 2013, the United States District Court for the District of Columbia enjoined the Internal Revenue Service from enforcing the regulatory requirements for registered tax return preparers (RTRPs). In accordance with this order, tax return preparers covered by this program are not required to complete competency testing or secure continuing education. The ruling does not affect the regulatory practice requirements for CPAs, attorneys, enrolled agents, enrolled retirement plan agents or enrolled actuaries.

On Friday, February 1, 2013, the Court modified its order to clarify that the order does not affect the requirement for all paid tax return preparers to obtain a preparer tax identification number (PTIN). Consistent with this modification, the IRS has reopened the online PTIN system.

The IRS continues to have confidence in the scope of its authority to administer this program and is working with the Department of Justice to address all options, including a planned appeal.

Author's Comment: Experts who have been following this case believe that IRS will eventually be allowed to legally enforce regulations on all tax return preparers, including the RTRP competency exam and continuing education requirements. The judge in this court case acknowledged the benefits of such regulation. The IRS will probably obtain this authority by either winning its case upon appeal or by having Congress step in to enact legislation giving the IRS regulatory authority over all tax return preparers. It is our opinion that those who have already obtained the RTRP designation prior to this court ruling will eventually be grandfathered in as licensed tax return preparers.
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