Taxable Talk

Well, that didn’t take long.

As I predicted back on June 26th, the American Institute of CPAs (AICPA) has filed a lawsuit asking the court to stop the IRS’s new “Annual Filing Season Program.” From the AICPA’s press release:

The AICPA has been a steadfast supporter of the IRS’s overall goals of enhancing compliance by tax return preparers and elevating ethical conduct. However, the IRS’s new rule regulating tax return preparers is an unlawful exercise of government power.

By implementing a purportedly “voluntary” program that is mandatory in effect, the rule is an end-run around Loving v. IRS, a federal court ruling which struck down the IRS’s earlier attempt to regulate tax return preparers. The IRS simply does not have the authority to proceed with the new rule. By doubling the number of categories of tax return preparers to eight, the rule will also confuse consumers. Worse yet, the new rule will do nothing to address the problem of unethical or fraudulent tax return preparers – which should be a top priority.

As a result, the AICPA has filed suit in federal court to prevent the IRS from moving ahead with this unjustified and unlawful program.

The full lawsuit filing is available here.

The AICPA’s lawsuit contends that the IRS does not have statutory authority for the new program, that the IRS did not allow a comment period (in violation of the law), and that it was arbitrary and capricious in violation of the Administrative Procedure Act. If the latter sounds familiar, it should: The Loving decision was based on the APA. The AICPA contends that the new IRS program is the old RTRP program dressed up with very minor changes.

I suspect the new Annual Filing Season Program will never have its first tax season.

Tags: PreparerRegistration

This entry was posted on Tuesday, July 15th, 2014 at 2:14 pm and is filed under IRS. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.