Legal News

IRS Lacks Authority to Regulate Paid Tax Preparers
Download PDF
1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)

During 2009, the IRS Commissioner Doug Shulman conducted a 6-month background study on Tax Preparer Standards. Input was obtained from all segments of tax industry participants to develop “uniform and high ethical standards of conduct for tax preparers” as a way to increase tax compliance and reduce the “tax gap.”

Bloomberg News reported that crooked preparers have been known to falsify information and to claim refundable tax credits for their clients, typically by manipulating taxpayer income, expenses and dependents. The IRS issued new rules in 2011 to address concerns about the performance of some preparers.


A federal appeals panel said the U.S. Internal Revenue Service lacks authority to regulate paid tax preparers upholding a lower-court ruling and throwing out licensing rules for as many as 700,000 practitioners.

The IRS required that paid preparers pass a certification exam, pay annual fees and complete at least 15 hours of education courses annually. The rules imposed standards on preparers who are not certified public accountants, attorneys or enrolled agents already licensed to practice before the IRS.

According to The Income Tax School, the official statements from the IRS are as follows; “On Friday, Jan. 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. 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.

Get JD Journal in Your Mail

Subscribe to our FREE daily news alerts and get the latest updates on the most happening events in the legal, business, and celebrity world. You also get your daily dose of humor and entertainment!!

On Friday, Feb. 1, 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.

We remain confident in our legal authority and committed to protecting taxpayers through implementing reasonable standards in the tax preparation area. Our appeal of the district court opinion was filed on Mar. 29, 2013.”

Accountants and tax preparation companies such as the nation’s largest tax preparer, H&R Block Inc. supported the regulation. Dan Alban, of the Libertarian Institute for Justice in Arlington, Virginia, called this a major victory, saying that this is about the freedom to choose your tax preparers. Taxpayers get to choose, not the IRS.” According to the L.A. Times, a spokeswoman Julianne Breitbeil said, “It’s critical for taxpayers to be able to rely on quality work from tax preparers.”

Image Credit:


Interesting Legal Sites You May Like




Search Now

Insurance Defense Attorney


Hollywood office of our client seeks insurance defense attorney with 2-4 years of litigation experie...

Apply Now

Senior Family Law Associate Attorney


Irvine office of our client seeks senior family law associate attorney with 10+ years of experience....

Apply Now

Civil Litigation Associate Attorney


Loveland office of our client seeks civil litigation associate attorney with experience. The candida...

Apply Now


Real Estate Attorney


The Law Offices of Stephen K. Hachey, P.A. is looking for a Florida licensed attorney with 0 to 4 ye...

Apply now

Legal Secretary

USA-NY-Staten Island

LEGAL SECRETARY Requires 5+ yrs. experience in plaintiff\'s personal injury litigation for firm on S...

Apply now

Labor and Employment Law Associate - Burlington, VT or Lebanon/Hanover, NH area


Downs Rachlin Martin seeks an associate attorney with 1-3 years of experience to join its Labor and ...

Apply now

Associate Attorney


Small AV lawfirm in Baltimore County seeks an associate with a minimum of four years of experience i...

Apply now


To Top