Blog Archives

Unfortunate Ruling as Appeals Court Upholds Decision to Overturn IRS Paid Preparer Regs

U.S. CapitolIn a disappointing but not wholly unexpected decision, the U.S. Court of Appeals for the DC Circuit upheld the District Court’s ruling in Loving v. IRS that bars the IRS from fully implementing its paid preparer regulations. While this does not do away with requirements to obtain a PTIN for commercial tax preparers, it does continue to prevent testing and continuing education requirements from taking effect for the thousands of tax preparers who would have been regulated as Registered Tax Return Preparers. This also means it’s time to take the fight for a well-regulated tax preparation field down other avenues. Read the rest of this entry

Underscoring IRS authority for paid-prep rules

Capitol BuildingWhen a U.S. District Court judge set-aside IRS regulations of commercial tax preparers in January, he said the agency lacks the statutory authority to impose such rules.

Many policy experts and organizations respectfully disagree, including NCTC. We long have believed the IRS has the proper legal standing – not to mention the fundamental responsibility – to develop and enforce rules to protect taxpayers from fraud or incompetence at the hands of paid tax preparers. And we continue to maintain that.

Nonetheless, the process of appealing the district-court decision could take a great deal of time, and its outcome is uncertain. So, we welcome such proposals as the “Taxpayer Protection and Preparer Fraud Prevention Act” (H.R.1570), filed last month by U.S. Rep. Cedric Richmond of Louisiana. Read the rest of this entry

The biggest error: Losing paid-prep regs

An estimated two-thirds of taxpayers claiming the Earned Income Tax Credit (EITC) turn to commercial preparers for help filing their tax returns.

However, basic Internal Revenue Service (IRS) regulation of such preparers – setting minimum training and licensing standards – was halted by a federal district court judge in January. That makes the latest report on improper EITC payments particularly frustrating. Read the rest of this entry

Going to court for consumers

scalesRetaining basic, common-sense regulations of commercial tax preparers is critical to protecting consumers from fraud, abuse, and incompetence, we’ve reiterated in court papers filed last week.

NCTC joined the National Consumer Law Center in filing an amicus curiae (“friend of the court”) brief on April 5 in the U.S. Court of Appeals for the District of Columbia Circuit. Our move comes in support of the IRS attempts to reinstate paid-preparer rules recently struck-down by a lower court decision. Read the rest of this entry

Appeal for common sense in paid-prep ruling

Tax Prep BewareOpponents of regulations for commercial tax preparers like to argue that they’re sticking-up for the proverbial little guy – the individual taxpayer, not to mention the small businessman or -woman. Establishing rules for paid preparers only creates burdens for small businesses, they say. And they add that those burdens carry costs that are, in turn, passed-along to customers.

But these arguments actually turn the truth on its head. Protecting individual taxpayers from unscrupulous or incompetent tax preparers demands some fundamental, common-sense standards. It’s not too much to ask that commercial preparers obtain basic training, pass competency exams, and seek continuing education to stay current on ever-changing tax laws. Yet these are exactly the rules that a U.S. District Court judge overturned last month in a ruling the IRS formally appealed last week. Read the rest of this entry

Paid-prep rules encounter a bump in the road

GavelThe movement toward common-sense regulation of paid tax preparers has hit a bump, but hopefully not for long.

A federal judge has ruled against the Internal Revenue Service’s efforts at better-safeguarding the financial security of the tens of millions of taxpayers who turn to commercial preparers each year. However, NCTC and the VITA field strongly urge federal policymakers to take the next wisest, appropriate steps necessary to ensure taxpayers don’t lose ground in the pursuit of accurate and high-quality services – steps that include the possibility of an appeal. Read the rest of this entry