IRS Files Intent to Appeal Recent Ruling

A recent lawsuit arguing the IRS lacks the authority to require tax preparers to pass a competency exam and take continuing education courses brought the IRS’s RTRP (Registered Tax Return Preparer) program to a screeching halt when the federal court judge agreed and issued a ruling that voided the RTRP process.  But the IRS is not accepting the ruling without discourse.  Last week, it filed notices with a federal district court and an appeals court of its intention to appeal the judge’s ruling.

The IRS had previously requested that the judgment be suspended so tax season would not be disrupted.  This request was denied, but it was allowed to re-open the PTIN (Preparer Tax Identification Number) online registration system.  It was also made clear that preparers are allowed to take competency tests and continuing education courses at their own discretion, but the IRS can, in no way, insist preparers to do so under the current ruling.

There are a couple of obstacles the IRS must overcome before they can file the actual appeal, but the notices they filed last week indicate that it is their hope that an opening brief will be submitted in March.  At that time, they will move for an expedited oral argument.

The RTRP process was designed as part of the IRS’s efforts to help increase the quality of the tax preparation industry and improve service to taxpayers.  The IRS believes that requiring all tax preparers who receive compensation for tax preparation services complete a competency test and continued education requirements will help establish a protocol that will help assure taxes are prepared by individuals who are both knowledgeable and proficient.