[IMGCAP(1)]The ruling last Tuesday by the U.S. Court of Appeals for the District of Columbia (see “Tax Preparers Defeat IRS in Appeals Court Ruling on Licensing Scheme”) did not surprise me and didn’t surprise many of my colleagues in the accounting profession, including the IRS representatives I know. The justices’ ruling clearly limits the authority of the IRS. By not allowing the IRS to regulate all tax preparers, it handicaps the government agency from being effective in its role of collecting the nation’s revenue.
The justices stretched the boundaries of their authority with an interpretation that is questionable. The law states in an 1884 statute that the IRS may “regulate the practice of representatives of persons before the Department of the Treasury.” This includes CPAs like myself, attorneys and Enrolled Agents, but, according to last Tuesday’s ruling, it does not include every tax preparer who is paid a monetary fee for preparing someone else’s taxes.
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