A federal court in Georgia has dismissed a case challenging the IRS’s power to charge tax practitioners for the Preparer Tax ID Numbers, or PTINs, that they are required to have to prepare taxes professionally.

Allen Buckley and Allen Buckley LLC had brought suit against the U.S. claiming that the Department of Treasury and the IRS lack statutory authority to charge a use fee for tax return preparers to obtain and renew their PTINs. In addition, Buckley charged that the $50 annual user fee charge is arbitrary and capricious as well as excessive.

On cross motions for summary judgment, the U.S. District Court for the Northern District of Georgia, Atlanta Division, held for the government.

The court noted an Eleventh Circuit case, Brannen v. U.S., which held that the regulation imposing a use fee to obtain a PTIN was established in accordance with 31 U.S. C. Section 9701, which enables agencies to charge agency user fees.

“Because this court can find no reason for ignoring the Eleventh Circuit’s clear guidance in Brannen, the court grants the defendant’s motion for summary judgment to the extent that the plaintiffs challenged the constitutionality of the imposition of the original user fee,” the court stated.

Moreover, the fact that IRS revenues from the program exceeded the agency’s outlays connected with the program in that year does not render the user fees excessive, the court said, saying that there is evidence that the PTIN program has not been fully implemented, and excess monies collected by the IRS in 2012 could be used in future years to roll out other aspects of the program. 

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access