March 13, 2012
Sabina Loving of Chicago, IL, John Gambino of Hoboken, NJ, and Elmer Kilian of Eagle, WI, with legal team from the Institute for Justice file a complaint against the IRS. They argue the IRS does not have the right to regulate tax preparers with requiring 15 hours of Continuing Professional Education (CPE) and passing the Registered Tax Return Preparer (RTRP) exam.
June 4, 2012
The IRS files an answer to the complaint, where the majority of the 99 allegations made in the Plaintiff’s complaint are denied. The IRS asks the Court to deny the relief sought and dismiss the complaint with prejudice, meaning the plaintiffs cannot re-file a complaint at a later date.
September 28, 2012
The Plaintiffs (Loving, Gambino, Kilian) file a Motion for Summary Judgment and Supporting Memorandum. The summary judgment requests the Court to make an early decision and not allow the case to go to trial as there are no facts in dispute and only issues of law remain.
October 26, 2012
The IRS files its response requesting that the Plaintiffs' Summary Judgment Motion be denied. In addition, the IRS has filed its own Motion for Summary Judgment. Essentially, both parties are claiming there are no material facts for a jury and that the judge should simply make the ruling. If the Court finds there are no facts in dispute, it will make a decision one way or the other. If the Court's decision disposes of the entire matter, the lawsuit would terminate early and would not go to trial.
November 20, 2012
The Plaintiffs file a Consolidated Memorandum in Opposition and Reply to the Motion for Summary Judgment the IRS filed on October 26. The Plaintiffs continue to argue that the IRS does not possess authority under any statue or agency authority to enforce the licensing scheme for RTRPs.
December 10, 2012
The IRS files a Defendant’s Reply Memorandum in Support of Motion for Summary Judgment. The memo continues to argue the Plaintiffs' opposition was inaccurate assessment of legislation and requests that the Court grants the IRS’ motion for summary judgment and deny Plaintiffs’ cross-motion for summary judgment.
December 17, 2012
The Plaintiffs file a Motion for Leave to File Surreply and attach a surreply. The surreply is in response to new arguments and factual claims that the IRS made in the last memo filed. The Plaintiffs claim the IRS raised new arguments supported by new authorities (Circular 230) that were not made in their initial brief. The surreply is a series of rebuttals to the IRS’ previous memo.
January 18, 2013
Judge James E. Boasberg issues a Court Opinion and Order in favor of Plaintiffs. The Judge states that the IRS overstepped their authority by regulating tax return preparers and that Congress never gave the IRS the authority to license tax preparers and that the IRS cannot give itself that power. This means there is no longer a requirement to take the RTRP exam or obtain continuing education.
January 23, 2013
The Justice Department, on behalf of the IRS, files a Motion to Suspend the Injunction Pending Appeal. This motion requests the Court to lift the injunction while the IRS files an appeal as they believe they will win the appeal.
January 29, 2013
Plaintiffs file Opposition to Defendant's Motion to Suspend Injunction Pending Appeal.
February 1, 2013
The Court files a Memorandum Opinion and Order in which it clarifies the specifics of the injunction and refuses to stay its injunction. The injunction was modified to make it clear that the IRS is not required to suspend its PTIN program, nor is it required to shut down all of its testing and continuing education centers; instead, they may remain, but the IRS cannot require tax preparers to pay testing or continuing education fees or to complete any testing or continuing education unless and until this injunction is stayed or vacated by the Court of Appeals.
The memo clearly states that Congress specifically authorized the PTIN scheme and it does not fall within the scope of the injunction; therefore, the requirements for all tax professionals to obtain and use a PTIN may “proceed as promulgated, except that the IRS may no longer condition PTIN eligibility on being “authorized to practice.” This means the IRS cannot dictate that a preparer must pass the RTRP exam before obtaining a PTIN; however, they can say that all those who prepare tax returns for compensation must obtain and use a PTIN.
February 20, 2013
On behalf of the IRS, the Department of Justice files a Notice of Appeal preserving the IRS’ right to appeal. As a government entity, the IRS has up to 60 days from the ruling to file its appeal.
February 25, 2013
The IRS files the Government’s Motion for a Stay Pending Appeal. This motion requests that the Appellate Court reinstate the RTRP program during the appeals process. The motion argues that the stay is in the best interest of the IRS, tax preparers and most importantly, taxpayers. The motion states that “[t]he greatest harm from the injunction will come in 2014, when the regulations meant to guard taxpayers from incompetent and unethical tax-return preparers are scheduled to become fully operational. The IRS estimates that fraud, abuse, and errors cost the taxpaying public billions of dollars annually.”
The motion also includes a Declaration of Carol Campbell, which includes 21 declarations covering Campbell's background, as well as the financial harm and the harm to tax administration and public because of the Court's Order.
March 8, 2013
The Plaintiffs file an Appellees’ Response to Government’s Motion for a Stay Pending Appeal.
March 14, 2013
The IRS files The Government’s Reply to Appellees’ Response to the Government’s Motion for a Stay Pending Appeal.
March 27, 2013
Three circuit judges from the D.C. Circuit Court of Appeals deny the IRS' request for the injunction to be lifted. The ruling states, "Appellants have not satisfied the stringent requirements for a stay pending appeal."
March 29, 2013
The IRS files a Brief for the Appellants with the Court of Appeals for the D.C. Circuit. The brief argues that the District Court incorrectly interpreted the law in declaring the tax return preparer regulations invalid and enjoining their enforcement. The brief argues that the tax return preparer regulations are a reasonable interpretation of authority granted to the Secretary. “The District Court erred as a matter of law in holding that 31 U.S.C. § 330(a)(1) unambiguously foreclosed the Secretary of the Treasury from regulating the practice of tax return preparers, and, accordingly, erred in declaring the tax return preparer regulations invalid and enjoining their enforcement.”
April 1, 2013
The Government files a Motion to Set Briefing Schedule and to Expedite Appeal. The brief requests that the Court expedite the appeal by assigning May 17, 2013, as the due date for appellees’ response brief and May 31, 2013, as the due date for the Government’s reply brief, and setting oral argument for the earliest available date.
April 4, 2013
The United States Court of Appeals approved the motion to expedite. The court clerk has been directed to schedule oral arguments for a date following those briefings; therefore, the case will not be heard until June. Depending on the Court's calendar and its interest in expediting this case, oral arguments could be scheduled as soon as 7-10 days after briefings and a ruling issued 7-10 days thereafter. However, that would be fairly accelerated.
April 5, 2013
Two amici curiae briefs are filed. Amicus curiae is a Latin term meaning “friend of the court”. Amicus curiae briefs are filed in many Supreme Court matters, where outside parties, who are not a part of the litigation, but believe that the Court’s decision will affect their interest, file a brief that provides additional information and legal arguments.
The first brief filed was from five former Commissioners of the IRS. The brief filed takes no position regarding whether the manner in which the Treasury has chosen to regulate tax return preparers is advisable, but they strongly disagree with the District Court’s view that Congress has not empowered Treasury to do so. The Commissioners argue that contrary to the District Court’s opinion, preparing and filing a tax return is indeed the presentation of a case, in which taxpayers pursue a wide variety of financial claims against the Treasury. The brief states, “Far from being a mere bookkeeper, a tax return preparer who advises and assists in preparing a tax return may be solely responsible for ‘presenting the case’ for the taxpayer’s eligibility for the benefits provided by crucial government programs administered through the tax system” intended by Congress.
The second brief filed was from the National Consumer Law Center and National Community Tax Coalition, advocates for low-income consumers and taxpayers, arguing for their interests and explaining how they have been victimized by the incompetence and abuse of paid tax preparers. The brief contains over 20 pages of reports describing interactions with unscrupulous preparers. The brief upholds the IRS’ argument that the lack of registration of tax return preparers results in fraud and abuse to individual taxpayers and the U.S. Treasury.
April 15, 2013
Representative Cedric Richmond presents a bill to the House Ways and Means Committee, H.R. 1570, Taxpayer Protection and Preparer Fraud Prevention Act of 2013. This bill would amend title 31, to provide regulation of tax return preparers.