RTRP Court Case Updates

May 14, 2014
The deadline has passed for the IRS to file a petition with the Supreme Court in the Loving case; thus finalizing the court’s decision.

February 11, 2014
The United States Court of Appeals for the District of Columbia Circuit issued their opinion on the Loving case and affirms the judgment of the District Court. Therefore, the IRS is enjoined from enforcing its licensing, testing and continuing education regime for tax preparers who are not otherwise regulated.

September 26, 2013
On Tuesday, September 24, oral arguments were heard in the Loving v. IRS case. The IRS was first to present their arguments, followed by representatives of Loving et al. The IRS finished with a rebuttal. Both sides were questioned by the judges on a variety of topics, including:

  • Definition and history of the terms "representation" and "presenting a case"
  • Intent of the regulations
  • Whether or not paid preparers are the biggest problem of inaccurate prepared returns
  • Why volunteer preparers (VITA) are not included in the regulations
  • Power of Attorney requirements

The oral arguments, in its entirety, are available as recordings on the U.S. Court of Appeals for the District of Columbia Circuit website.

June 28, 2013
The United States Court of Appeals for the District of Columbia Circuit Court will hear oral arguments in the Loving v. IRS case on September 24, 2013 at 9:30 AM ET. The oral argument will be before Circuit Judge Kavanaugh, and Senior Circuit Judges Williams and Sentelle. Each party will have the opportunity to present their arguments before the judges. It is typical for judges at the appellate level to actively ask questions at this time.

June 6, 2013
On June 5, the IRS filed the Reply Brief for the Appellants. The brief argues that the term “practice of representatives of persons before the Treasury Department” in §330(a)(1) is ambiguous and, even though prior IRS administrative practice chose not to apply this term to tax return preparers, it doesn't mean it cannot be applied now.

May 28, 2013
On May 24, 2013, seven tax preparers and the Tax Foundation filed an Amici Curiae in Support of Plaintiffs-Appellees. The seven tax preparers include unenrolled, enrolled agents and CPAs. The amici curia presents three arguments. The first argues against the amici curiae filed by five former Commissioners that preparing a tax return is not “presenting a case.” The document argues, “Preparing a tax return instead involves merely the presentation of conclusions regarding the various items that should be reported on the return.” The other two arguments presented are that the RTRP regulations violate the arbitrary and capricious standard and notice and comment requirements.

May 20, 2013
On May 17, 2013, the Brief of Plaintiffs – Appellees was filed with the United States Court of Appeals in the Loving case. The brief argues that Judge James E. Boasberg of the U.S. District Court for the District of Columbia correctly interpreted 31 U.S.C. § 330. The brief states: “As the district court noted, preparing a tax return is nothing like “presenting” a “case.” A tax return is informational, and does not contain advocacy or argument. It is simply a (mandatory) self-assessment of one’s tax liability that reports financial information, such as income, tax payments, and charitable contributions, as well as any relevant life events, such as a change in marital status, a change of job, or children, and shows the calculations made to determine one’s tax liability.”

In addition, the brief notes, “Both amicus curiae briefs submitted in support of the IRS rely primarily on policy arguments—such as tax code complexity or anecdotal allegations of [tax preparer] errors—which are improper for this Court to consider in evaluating an ultra vires challenge to agency regulations.”

May 16, 2013
The IRS released the following statement in regards to refunds for cancelled RTRP test appointments:

Fee amounts collected for scheduled registered tax return preparer test appointments canceled due to the court ordered injunction are being refunded. Additionally, fees collected from return preparers who tested on or after January 18, 2013, the date the test was enjoined, are also being refunded. No additional refund or reimbursement requests related to registered tax return preparer regulation are being provided or considered at this time. E-mail notifications will be provided to those receiving refunds to explain the process. No action is necessary to receive the refund. A credit for the test fee will automatically be made to the account used to pay the fee. It is anticipated that all refunds will be processed by July 19, 2013.


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