Court ruling suspends IRS competency program
By: Jeffrey J. Quatrone RTRP | February 2nd 2013
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Three tax preparers sued the Internal Revenue Service in the United States District Court for the District of Columbia and on January 18, 2013 were granted summary judgment by the Honorable James E. Boasberg prevailing in blocking the IRS from requiring paid tax return preparers to pass an exam, background checks, and institute continuing education requirements.
The three plaintiffs; Sabina Loving, Elmer Kilian, and Giovanni Gambino filed suit claiming among other things the Internal Revenue Service does not have the authority to regulate tax return preparers. Loving in court documents states due to new requirements she will have to "raise prices and likely lose customers." The other two plaintiffs' declare they will "likely close their tax business if forced to comply." Completing the exam requirements was supposed to be mandatory by December 31, 2013 with 15 hours of continuing education credits and a PTIN required by December 31, 2012. The IRS was to begin a public media campaign in early 2014 advising taxpayers of the new requirements.
In the past and now foreseeable future if you charge someone to prepare taxes there are no requirements other than signing the return you prepared and an IRS assigned Preparer Tax Identification Number (PTIN). The Internal Revenue Service instituted the Registered Tax Return Preparer (RTRP) program to assure consumers that the people they were paying to complete their taxes met minimum qualifications. If you should use a preparer it is strongly suggested that you check their qualifications and experience before you hire someone, keeping in mind that just because you have gone to a brand name firm it does not guarantee the preparer is qualified. Certified Public Accountants, lawyers and Enrolled Agents (an IRS certification) are all required to maintain licensing and education requirements by their governing boards. As of October 2012 only about 22,000 people out of over 300,000 tax return preparers completed the RTRP exam.
The IRS has vowed to appeal the ruling. Costs associated with the program were minimal. A one-time exam fee of $160 was required, annual PTIN registration of less than $70 and there are several companies offering the education requirements for around $150. The IRS working with the Department of Justice asked for the injunction to be lifted and has confidence of its authority to administer the program. The IRS on its website January 23, 2013 has stated if the injunction is not lifted it will file an appeal within 30 days.
A link to the ruling is included:
https://247taxcpe.com/RTRP_Information.html
The author Jeffrey J. Quatrone is an IRS Registered Tax Return Preparer in the Phoenix area. For more information visit: www.JJQtaxprep.com
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