Yesterday the IRS released a new version of the Power of Attorney form (Form 2848). The IRS has added the ability for a fourth representative for a taxpayer. They also noted two new matters for the POA (the Section 5000A Shared Responsibility Payment and the Section 4980H Shared Responsibility Payment).
Both the taxpayer and the taxpayer’s representative must sign the form (that’s not a change). When the representative signs the form, he or she must note his title. I was quite surprised to see the following as a choice for a representative’s designation:
i Registered Tax Return Preparer—registered as a tax return preparer under the requirements of section 10.4 of Circular 230. Your authority to practice before the Internal Revenue Service is limited. You must have been eligible to sign the return under examination and have prepared and signed the return. See Notice 2011-6 and Special rules for registered tax return preparers and unenrolled return preparers in the instructions (PTIN required for designation i).
In Loving v. IRS, the IRS was permanently enjoined from the Registered Tax Return Preparer designation. One would think that the IRS would realize this and remove the designation from forms. I’ve sent the IRS a note reminding them that there is no such thing as an RTRP and this should be removed from Form 2848.
Overall, the new version of Form 2848 has just minor changes.
[…] Fox, The IRS Apparently Thinks They Won the Loving Case. “In Loving v. IRS, the IRS was permanently enjoined from the Registered Tax Return […]
Russ – I feel the need to clarify some miscommunications in your post. The new version of Circular 230 (rev. June, 2014) [T.D. 9668] is based on the proposed regulations (REG-138367-06) issued in September 2012, before Loving was decided. None of the revisions (portions of §10.1, §10.3, §10.22, §10.31, §10.35, §10.36, §10.37, §10.81, and §10.91) were specific to RTRPs or the Loving decision. Regardless of the Loving outcome, the final regulations still would have come out of the long approval process at Treasury and the OMB as they were revised shortly after the public comment period in 2012. Additionally, any changes that may be made to the regulations as a result of court case(s) will need to go through the same notice and comment procedures. Circular 230 is a regulation, after all, not just a publication that can be modified administratively.
More importantly, IRS was not permanently enjoined from promulgating the RTRP designation. Loving merely prohibits IRS from forcing the mandatory regime of testing and continuing education of the RTRP program. Note that under the new AFSP rule, persons who passed the RTRP exam are referenced as a category of preparer who is exempt from the AFTR Course requirements. IRS did step back from the RTRP program during the Appeal of Loving, but has always had the ability to continue it as a voluntary program (as spelled out in the DC District Court’s decision).
As the “owner” of Form 2848, I’d like to clarify what Loving did and did not say: IRS was enjoined from requiring a test be taken and passed before a PTIN could be obtained, and from requiring annual CPE in order to renew the PTIN. The District court also acknowledged that the IRS could register/license individuals on a voluntary basis. Nothing in the decision addressed the use of the RTRP designation. In fact, those who passed the RTRP exam before the injunction (nearly 75000) are being exempted from the annual federal update requirement put in place by the new voluntary record of completion program (see Rev Proc 2014-42). The President has also put forward a legislative recommendation to amend 31 USC 330 to provide for mandatory regulation of return preparers. This is a difficult issue to address in black and white terms but please don’t assume the IRS can’t figure out what the law says and doesn’t say.
[…] surprised this evening to see that Ms. Hawkins commented on my post of earlier this week titled, “The IRS Apparently Thinks They Won the Loving Case.” Ms. Hawkins stated, As the “owner” of Form 2848, I’d like to clarify what Loving did and did […]
[…] Me… The Director of the IRS Office of Preparer Responsibility commented on Russ’ post “The IRS Apparently Thinks They Won the Loving Case.” Russ replies to the comment: Ms. Hawkins is technically correct that Judge Boasberg’s order […]