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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?
Preston Benoit, Deputy Director of the Return Preparer Office (RPO), said in late February 2013 that due to the injunction, the IRS neither recognizes nor endorses the RTRP credential. The IRS will not comment on whether or not a professional can use the credential, but he did say there was nothing stopping professionals from displaying their certificates.

The IRS has removed the RTRP designation from the online PTIN system. In a May 2013 NPL meeting, Carol Campbell, Director of RPO, stated that the IRS currently has no "official" position on whether or not it can be used. The IRS has not reached out to anyone who is using the designation.

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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