The last three weeks have been rather important in the world of taxmaker oversight!
It all started last March when three taxpayers filed a lawsuit against the IRS, seeking to end the testing requirements that would require tax return preparers to demonstrate competence, and to maintain proficiency by taking 15 hours of continuing education courses, to continue preparing and filing tax returns for clients. they.
A few weeks ago news came that U.S. District Court Judge James E. Boasberg of DC District Court had won the plaintiffs, stating that contrary to the IRS statement, the agency has no legal power to regulate individual taxpayers. The judge ordered the IRS to continue conducting tests to certify the competence of the SPT compiler.
Last week it was announced that the IRS, in collaboration with the Department of Justice, had moved to withdraw the initial order, while it prepared an appeal to be filed within the next 30 days.
The lead attorney for the tax preparer who filed the lawsuit against the IRS believes after the initial decision issued by Judge Boasberg is definitive and unequivocal in his intention to discontinue the IRS rule requiring individual taxpayers to take a competency test, and expressed confidence that the Judge would not reverse that decision. .
However, on February 1, the Judge responded to the motion from the IRS, along with the Department of Justice and reversed the previous decision. At least for now, the IRS does not have to close the SPT officer registration program, but instead, based on the amended decision, the Judge does not require tax officers to take competency tests and pay taxes. required testing fee to the IRS. Under a modified Judge’s decision, exam makers can take the exam voluntarily and are not required to pay an exam fee. However, taxpayers are still required to file and obtain a registration number, or PIN, from the IRS, in order to be eligible to file a tax return.
Under the new ruling, the IRS does not need to dismantle an existing expensive and complex program at a cost of millions of dollars, as such steps would prove unnecessary if this court decision were overturned on appeal.
The IRS has indicated that it will appeal the U.S. District Court ruling that the agency lacks the power to license hundreds of thousands of taxpayers working on the preparation of individual tax returns, and alluded to the fact that immediate termination of the tax preparer oversight program would seriously disrupt tax administration. There has been a delay in the date to start filing individual returns, which was moved to January 30. Some returns will not start processing until later.
Given the events that occurred in the last few weeks, one thing was certain. The IRS will appeal the Court’s decision to suspend the RTRP competency test and the plaintiffs who filed the original lawsuit may continue to try to thwart the IRS’ intent to regulate the tax preparation industry.
However, judging by the opinions posted on blogs by tax practitioners who have studied and passed the RTRP exam, a supervisory program is needed to reduce the potential for fraud and malpractice, reduce gross errors in the SPT which ultimately harms taxpayers. , but above all, present the RTRP certification as a symbol of professional pride and demonstrated competence, which will work for the benefit of tax professionals by increasing the trust and confidence of taxpayers in their tax preparer work.