The Internal Revenue Service has decided not to appeal a district court case which ruled that the agency doesn’t have the authority to regulate return preparers’ contingent fee arrangements for refund claims.

The case, Ridgely v. Lew, 7/17/2014, was decided by the U.S. District Court for the District of Columbia on a motion for summary judgment brought by CPA Gerald Lee Ridgely, Jr., executive vice president and vice chairman of global tax preparation firm Ryan. 

The ruling invalidated and permanently enjoined the IRS from enforcing Circular 230 restrictions generally prohibiting attorneys, CPAs, and Enrolled Agents from entering into contingent fee arrangements for ordinary refund claims and amended returns (see IRS Can’t Regulate CPA Preparers’ Fee Arrangements for Ordinary Refund Claims). As a result, the decision is now final.

“This long-fought battle to protect taxpayers and their representatives from the IRS’s efforts to limit their ability to pursue valid claims is finally over,” said Ridgely. “We are very gratified that taxpayers, and not the IRS, now have the right to determine the fee arrangements between themselves and their representatives.”

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