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RTRP Court Case Overview

Three paid tax return preparers (plaintiffs), filed a lawsuit (Loving et al., 2013-1 USTC ¶50,156) challenging the authority of the IRS to issue the new Circular 230 regulations authorizing the IRS to license paid tax return preparers who are not otherwise regulated by their respective professions.

On February 11, 2014, the U.S. Court of Appeals for the District of Columbia Circuit upheld the decision of the lower court in the case of Loving vs. IRS, finding insufficient statutory support for the IRS’s regulation of federal tax return preparers; therefore, the IRS cannot require tax preparers to pay testing or continuing education fees or to complete any testing or continuing education.

The IRS has introduced a new voluntary Annual Filing Season Program.

FAQ

I received my RTRP certificate, can I continue to use the RTRP designation?
The only IRS purpose/recognition for the RTRP is to exempt a person from the Annual Federal Tax Refresher (AFTR) course in the Annual Filing Season Program (AFSP). According to the IRS, a person who received an RTRP certificate can use the designation, but the IRS just doesn’t recognize it for any purpose other than AFSP requirements.

If I passed the RTRP exam didn't keep up with my CPE requirements, will I have to take the AFTR course and exam?
If you passed the RTRP test and they decide to take a year off, you will still be exempt when you return.

If I have a Power of Attorney, will I still have limited representation rights even if I don't participate in the AFSP?
This is incorrect. After 2015, category “h – unenrolled return preparer” and "i – Registered Tax Return Preparer" will be removed from the Form 2848 and replaced with something similar to “AFSP Record of Completion Holder”. This will leave no eligible category for non-AFSP unenrolled return preparers or RTRPs to select. You could still submit a Form 8821, but it specifically states it is only for the purpose of authorizing someone to “receive your confidential information”. Also, “Form 8821 does not authorize your appointee to advocate your position with respect to federal tax laws; execute waivers, consents, or closing agreements; or to otherwise represent you before the IRS.”

Will RTRPs appear in the IRS database beginning January 2015?
No, only attorneys, CPAs, enrolled agents, ERPAs, enrolled actuaries, and AFSP Record of Completion holders will be included in the public directory.

Will I be reimbursed for taking the RTRP exam?
Refunds were processed only for those scheduled test appointment on or after January 18, 2013.

Do I need to get CPE for this year?
You need to continue to fulfill CPE only if you are an EA, CPA or attorney or fall under other state requirements. CPE is no longer mandatory by the IRS or for IRS purposes as it pertains to RTRPs, and it is voluntary. We are still reporting CPE to the IRS.

Will I be refunded my PTIN fees or will they no longer charge a PTIN fee?
As noted in the Court Memorandum Opinion and Order filed on February 1, 2013, Congress has specifically authorized the PTIN scheme/fees by statute. Also the fees were upheld in the court case Brannen, III, P.C. v. U.S., the IRS was sued for $64.25. The Eleventh Circuit court disagreed and held that the PTIN is issued to preparers for a special benefit, the privilege of preparing tax returns for others for compensation, and imposing fees for special benefits is authorized under 31 U.S.C. § 970.

Do I have to continue to renew my PTIN or get a PTIN if I prepare taxes?
Yes. As clearly stated in the Memorandum Opinion and Order filed on February 1, 2013, a PTIN is still required when preparing taxes for compensation. You must continue to renew your PTIN and include it on all tax returns you file. The PTIN system is available for processing renewals and applications.

Do I need to get a PTIN for my supervised employees?
Yes. Regulations require all paid tax return preparers to register with the IRS and obtain a PTIN. A PTIN must be obtained by all tax return preparers who are compensated for preparing or assisting in the preparation of all or substantially all of any U.S. federal tax return, claim for refund or other tax form submitted to the IRS. Supervised preparers are individuals who do not sign, and are not required to sign, tax returns as a paid return preparer, but assist in preparing the return.

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