court decision on IRS RTRP authority challenge

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Mark Bole 13 years ago

I received this today from NAEA, National Association of Enrolled Agents:

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"A decision was announced this afternoon regarding the 2012 court case Loving v. IRS, which challenged IRS? authority to regulate commercial preparers. United States District Court for the District of Columbia Judge James E. Boasberg granted Loving?s motion for summary judgment. The Court is granting a permanent injunction against IRS for what the opinion calls ?an invalid regulatory regime.?

"As with any legal matter, it is best not to jump to conclusions, particularly in the moments following major decisions. As we sit here on Friday evening, the obvious question is how IRS will respond. In any event, this situation will develop over the next week and upcoming months. NAEA will continue to interpret possible ramifications for enrolled agents and the overall tax community and will share our perspective during the back and forth volleying that promises to ensue."

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removeps-groups 13 years ago

Does the decision cover just the annual test, or also the annual $64 fee to get a PTIN? What was the gist of their argument -- I'm having a hard time opening the PDF. Is it because the law does not authorize this type of executive action?

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Alan 13 years ago

You can find a pdf version here:

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Effectively, the judge said that Congress never gave the IRS the authority to license tax preparers, and the IRS can?t give itself that power.

Quoting from various parts:

Without deciding whether any of these three textual points alone would be dispositive, the Court concludes that together the statutory text and context unambiguously foreclose the IRS?s interpretation of 31 U.S.C. § 330.

Plaintiffs first seek a declaratory judgment that Defendants lack statutory authority to promulgate or enforce the new regulatory scheme for ?registered tax return preparers? brought under Circular 230 by 76 Fed. Reg. 32,286. The Court will grant this declaratory relief.

Finally, the public interest would be served by a permanent injunction because the IRS?s new Rule is ultra vires. The Court will therefore grant permanent injunctive relief as well.

For the aforementioned reasons, the Court will grant Plaintiffs? Motion for Summary Judgment and deny Defendants? Motion for Summary Judgment. A separate Order consistent with this Opinion will be issued this day.

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D. Stussy 13 years ago

You can find a pdf version here:

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... ===============OK, [to repeat,] so does that mean that we should all file claims for refund for the PTIN fee since that is part of this "regulatory scheme?" I did read all 22 pages of the decision.

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Alan 13 years ago

Why not? I'd use Form 843 and check the box for "Fee."

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Bob Sandler 13 years ago

The decision does NOT apply to the PTIN fee. Here is a quote from the FAQ posted by the NATP.

"Do I have to continue to renew my PTIN? Yes, the PTIN regulations were separate from the Tax Preparer Registration regulations. In the closed case Brannen, III, P.C. v. U.S., the IRS was sued for $64.25 with the complaint that the Department of the Treasury lacked statutory authority to impose a user fee for obtaining and renewing a PTIN. The Eleventh Circuit court disagreed and held that the PTIN is issued to preparers for a special benefit, the privilege of preparing tax returns for others for compensation, and imposing fees for special benefits is authorized under 31 U.S.C. § 970."

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Bob Sandler

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court decision on IRS RTRP authority challenge

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