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Over when it's over: the IRS and expanded regulation of tax preparers

“It ain’t over ‘til it’s over,” the late Yogi Berra is said to have observed in his quotable heyday.

The phrase has come to mean that apparent endings are not always as final as they seem.

In this post, we will note, however, that the IRS’s efforts to impose competency testing and continuing education requirements on more professional tax preparers really do seem to be over.

We last wrote about this issue last winter, after a federal appeals court upheld a district court’s ruling that the IRS exceeded its authority in trying to impose the new regulations. The litigation challenging the regulations had been brought on behalf of several small tax preparers by an advocacy group called the Institute for Justice.

As we noted in our February 14 post, the IRS’s longstanding authority over other tax professionals – particularly CPAs and attorneys – remains in place.

The latest development in the case – and presumably the last – is that the IRS has decided not to appeal the appeals court’s ruling to the U.S. Supreme Court. The filing deadline to make that appeal passed earlier this week without action by the IRS.

To be sure, in the spirit of “not over until it’s over,” there does remain one possibility for resurrecting the requirements that the IRS had wished to impose. After all, Congress could, if it chose to, grant the IRS explicit authority to issue broader regulations for professional tax preparers.

This is by no means a likely scenario. But tax regulations are an inherently political subject. And in politics, few things are every really over.

Source: San Francisco Chronicle, "IRS misses deadline to appeal tax preparer rules rejection," Kathleen Pender, May 13, 2014

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