IRS Responds to District Court Decision
Susan Patterson - January 22, 2013 11:28 am
Over a year ago, three independent tax preparers along with the Institute of Justice, filed suit against the Internal Revenue Service claiming the new registered tax return preparer regulations were "beyond the powers" of the IRS and a substantial threat to the plaintiffs' livelihoods.
On Friday, January 18, 2013, the United States District Court for the District of Columbia handed down a decision granting permanent injunctive relief to the plaintiffs in the Sabina Loving, et. al. v. Internal Revenue Service, et. al case. In its surprising decision to the industry, the Court "has enjoined the Internal Revenue Service from enforcing the regulatory requirements for registered tax return preparers. In accordance with this order, tax return preparers covered by this program are not currently required to register with the IRS, to complete competency testing or secure continuing education." This court decision does not affect PTIN requirements. As of this notice, Prometric is administering RTRP Competency exams that have been scheduled. However, no new exams are being scheduled at this time.
"The Internal Revenue Service, working with the Department of Justice, continues to have confidence in the scope of its authority to administer this program. It is considering how best to address the court's order and will take further action shortly."
Recognizing that the IRS has made significant investment in recent years addressing tax preparer competency, the NARTRP is encouraging its members to "stay the course" during this period of uncertainty. We in this industry believe that education is an investment rather than an expense. A highly educated preparer is valuable to both the tax industry and to taxpayers. We believe education is an essential tool in growing a strong profitable business.
We will keep our members informed as new information becomes available.
Comments
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John Applegate So is the IRS going to reimburse me for the hundreds of dollars I spent preparing and testing for my RTRP designation? Posted January 22, 2013 3:11pm
Linda Lee Dredger Wow! Never expected this...I passed the test and it means nothing at this point. I think someone should have informed us that a court case was pending. Posted January 22, 2013 4:16pm
CARMEN A GARCIA Very happy about that , I already try the test and failed, but with the study with NARTRP IS BEEN VERY HELPFUL FOR ME. Thanks. Posted January 22, 2013 5:41pm
Victoria Petersen I'm with the rest - just took and passed my test on Dec 29. Had I known this was going on I wouldn't have spent so much money and time on continuing ed - not that it hasn't been helpful - it has - but now the remainder that didn't do these things are not on the same playing field we are. I feel cheated. Posted January 22, 2013 6:17pm
Emory Smith I am scheduled to take the test this Saturday. I have no problem taking a test to register and even the 15 CPE units. But passing a test does not make me a better preparer. The CPE's and other education will, not the test. I have been a teacher in the public school systems and had to take test along with others. Some passed with high marks and either could not or would not teach, just like some will take this test and then feel protected even more and either will not or can not do returns properly and ethically. With my Accounting degree and now beginning my 38th year in accounting and yes doing tax returns, I will still try to do the best to be very ethical as I have in the past. I have told clients to take their returns to others if they Posted January 22, 2013 9:36pm
Thomas Kind I retired from my full time county job 12/30/11. I went to work for an income tax service that is in a well known store making 9.50 an hr. I got my RTRP and went back again this season and am making 9.75 an hr. At the county job I was making 24 an hr. with benefits, painting offices....So far I'm getting close to breaking even studying for and passing the RTRP test! However, I have to say learning the material was good. The people I do taxes for are poor, so most of the material relating to interest and dividends is something I rarely have to consider. Posted January 22, 2013 9:37pm
ROBERT PARISEAU Robert Pariseau
I have been in the tax preparation business for over 40 years and had not taken an exam since 1970. I was a bit nervous but took and passed the exam on Dec 7. I actually don't have a problem with the requirements but feel like many others that it does not make me better at my job and certainly no circular 230 course will ensure that my practice is ethical.
Either you are or you are not. I know several CPA's that need to learn that. Posted January 23, 2013 2:54am
Beverly Thatcher Beverly Bartha
I was nervous about taking the test and in fact had to take it twice. Never expected this from the IRS. The testing and continue education was a great idea. I believe it would have help weed out the money hungry tax preparer that gives the other tax preparer a bad name. I will continue to go to classes and study the law so that I can be a better tax preparer. Posted January 23, 2013 5:34am
Fred Richter If this injunction holds up, I think the next step is a class action suit by all of us who have spent so much time and money demanding that the IRS reimburse us for registration fees, CPE costs and testing fees. But my bet is that it will be overturned. Posted January 23, 2013 6:18am
Mike Ippolito I, like others have mixed feelings on this. I think that the test has made me a better preparer as I had to study issues that I normally did not take into account, such as farm income. I have to say that my overall general knowledge increased.
That being said, I spent hundreds of dollars on course prep, test fees and so on, for somethng that is no longer required.
Does the designation of RTRP mean anything now? Do we take it off the business cards and letterhead?
IRS should have done its due dilligence. Again, overall, I believe the testing and CE requirements are a good thing and the taxpayer will benefit. Posted January 23, 2013 7:36am
Eileen Billings I enjoy the courses. We have to pass each course before we get the credit for it. Shouldn't that be enough for testing? Posted January 23, 2013 11:20am
Len Prather I agree with the IRS requiring a standardized test and continuing education as a requirement for individual tax return preparers. Like many professions, a standardize test and continuing education is a requirement to indicate a certain standard has been met to qualify that individual for the profession. In this case, an individual tax return preparer. Those who have gone through the process of preparing for the exam (and pass) can say without a doubt, the process has educated them and gave them more confidence in preparing returns. My dispute, is that we should not be limited in practicing before the IRS regarding individual returns when the requirements (standardize test and continuing education) have been met. Posted January 23, 2013 5:39pm
Sheila Lewis I took and passed the test. I don't agree with the courts decision for 3 people who seem to not want to comply to rules. I agree with other comments that a test is not going to make you a better preparer or any more ethical than you already are. Who can't benefit from more education, most of the hours are provided at no or little cost from the IRS. I think everyone should at least have to have the CPE units. Posted January 24, 2013 10:49am
Dale Harrington I have little doubt that the IRS requirements will still take effect at some point, either through action on their point or via legislation. In 15 years I've seen many taxpayers not get what they should have and/or getting in trouble because the person doing thier taxes had no clue. I for one welcome the requirements the IRS is trying to impliment. Our company has always required twice the CEU's that the IRS wants us to take each year, and if we have pride in the job we do, we should continue to strive to learn all that we can. Just My Opinion, and I know, no one asked. ;) Posted January 29, 2013 8:22am
Gregory Zakarian I have to say I agree with the regulations that the IRS was looking to impose. First, it puts some stability and credibility to our industry. You wouldn't go to a doctor that hadn't passed his or her boards, would you? Would you use an attorney that hadn't passed the bar exam? Then why would you use a tax professional that wasn't registered and met at least a basic certification process. Yes, it's not going to weed out every bad apple in the barrel. It's not going to make everyone who passes the test a super tax professional. What it will do is set up a set of guidelines that will set us all on one path and hopefully bring some stability to a profession that is really still in it's infancy.
I would like to have Judge Boasberg have his return prepared by the person that filed the suit and see what issues he runs into. I'm not saying that every tax professional that hasn't taken the test doesn't know how to prepare a return, but what's the harm in becoming certified and showing a little pride in our industry?
I applaud the IRS for their efforts and hope that they continue to fight the ruling of the DC court. I also encourage everyone in favor of the new regulations to contact your Representatives and Senators in Congress and encourage them to author and pass legislation allowing the regulations either by the IRS itself, or, an independent agency similar to the Bar Association or the State CPA Boards. Posted January 31, 2013 2:27pm