IRS looses round one on

[taxea]

"The Institute for Justice argued that the IRS lacked the statutory authority to impose the regulations and said they would put tens of thousands of mom-and-pop tax preparers out of business, because the regulations were onerous and create a competitive disadvantage to the attorneys and CPAs who were exempt"

What disadvantage? EA's, Atty's & CPA's already have regs to follow, fees to pay & cont ed and now with this ruling, EA's, Atty's & CPA's may have a disadvantage in the fees they charge due to all the fees their subject to for which the un registered, un enrolled is not subject to.

I think all of us that are either a EA, RTRP and/or CPA knows our Profession needs competency exam, cont ed, registration etc. Maybe the IRS has more tricks up their sleeve like that public database of EA's and RTRP's and promote it to the public thus promoting those designations. There also maybe other avenues the IRS could take to favor the EA & RTRP to the point the un enrolled & un registered will eventually cave unless of course that gets struck down by a judge.

One of the instructors at the EA class I attended I think obtained their EA via the IRS law that allows IRS employees with # of yrs experience with the IRS to be issued an EA w/o having to sit for the exam. He told the class I was in that once you obtain your EA, you will belong to this special club or group and from what I gathered he said, the IRS looks favorably upon EA's. Since I recieved my EA certificate, I have been placing the EA behing my name on all 8821's I fax in and maybe its my imagination but the IRS agents I talk to seem to treat me more professionalyl then prior to having my EA.

Why are you filing 8821's? As an EA you should be filing 2848 for everything. 8821's are too limited.

Aside from that...I only see the regulation as weeding out bad preparers rather than making it hard on mom and pop establishments. Perhaps someday we will see it actually weed out the big box establishments who are so lax in doing the right/lawful thing.

Has anyone seen anything yet on how the IRS is going to deal with this in the immediate future. An appeal will take time and they are, according to the court, not supposed to be carrying forward with their efforts to register etc other than their licensed pros. I haven't seen any reaction from the IRS yet...have you? If you have please emaill it to me....I do get all the IRS notices sent via email.

[Bees Knees]

While I agree that IRS won't leave a sleeping dog lie, it has been permanently enjoined not to enforce as presently constructed.

So this judge and what army is going to stop IRS from continuing to enforce their own rules?

IRS ignores federal district and appeals court decisions all the time. They are bound by the IRC, their own regs, and the Supreme Court. A federal district judge has no power to stop IRS from enforcing their own rules.

[Roberts]

That would still make the RTRP designation meaningful (though perhaps a misnomer).

You are on the right track I think. The IRS could also make a slight adjustment to their rules, allow a non-registered preparer to file returns using someone's PTIN and require registration and proof of knowledge to acquire your own PTIN.

If they did this and put 100% of the liability on the PTIN owner for any violations done by underlinings using their number - it'll achieve the same results. Nobody would want returns filed by a novice using their number.

[dtlee]

So, here is a queston....

Since it is already documented in Circular 230 that except in very specific circumstances only RTRPs and other credentialed tax preparers may represent clients before the IRS, is another alternative that the IRS would just leave this rule in place, negating any representation rights for anyone who does not achieve this designation?

Their right to create a class of professionals who can represent cases before the IRS has not been challenged by the courts.

That would still make the RTRP designation meaningful (though perhaps a misnomer).

[JohnH]

I am curious how those tax preparer's that were planning on leaving the buisness are going to react. Do you contact the client that you already told your exiting the business and now say I changed my mind.

Well, if you had announced you were leaving the business and this ruling altered you plans, your only choice would be to contact those clients and say you changed your mind. Not much else you could do. But I'm guessing that someone who's pretty good at their job would find that most clients would stick with them. Many people don't like change.

[veritas]

lawyers

We know its cold here in Portland when even the attorneys have their hands in their own pockets.

[ChEAr$]

While I agree that IRS won't leave a sleeping dog lie, it has been permanently enjoined not to enforce as presently constructed. Whether IRS will appeal is uncertain. It will have to prove that tax preparation IS representation. And I don't think they can. Many times we will help a client maybe to fill in the blanks for incorporation or forming an LLC. (He then does actually filing.) Does that mean we are representing him? We have no contact with state secretary of state
(And let's not argue practice of law - grin)

It's now up to congress in it's finite wisdom to take the ball and run with it. Of course I'm all in favor of regulation, don't get me wrong.

[AZ-Tax]

Same Here

Yes. I've already received several phone calls from people who need a new preparer, as theirs are no longer preparing taxes. (Attrition due to the formerly new rules, I thought.) Talk about sticker shock....mine! From how little some people are saying they were paying for tax prep.

I am curious how those tax preparer's that were planning on leaving the buisness are going to react. Do you contact the client that you already told your exiting the business and now say I changed my mind.

[Ken]

IRS and RTRP Regs

Well I was one of the first people to take and pass the test last year and I am still going to call myself a RTRP. It cost me $115.00 and I'm sticking to it. I have also taken my 15 hours of CE this year.
As stated in other posts here, I KNOW the IRS is not going to just lie down and forget about it, they are not going to let one single judge control this issue.

[BP.]

start charging reasonable fees instead of completing a return for a fraction of what any reasonable person would charge.

Yes. I've already received several phone calls from people who need a new preparer, as theirs are no longer preparing taxes. (Attrition due to the formerly new rules, I thought.) Talk about sticker shock....mine! From how little some people are saying they were paying for tax prep.

[erchess]

My two cents

I don't mind the existence of a class or classes of tax preparers below me but I think that when a given error is mad on a given return the penalties to the preparer if any should not vary according to one's designation. That is because the willingness to take more liberties with the law and the facts than I will gives the other folks a competitive advantage over me and serves both the individual taxpayer and the government poorly.

OTOH I see where the court is coming from. The solution is for Congress to act. I wonder what the chances of that are.

[Bees Knees]

If you think IRS is just going to crawl back in their little hole, think again. District courts often rule against IRS on all kinds of things, only to be overturned in IRS’ favor when it goes to appeals. This is one judge making this ruling. You think Congress is going to like that? I wouldn’t be surprised if Congress acts quickly, maybe in their next round of debt limit negotiations. If Congress wants to continue to spend, they need IRS to collect, and all the commissioner has to do is whine to Congress about how this court decision is going to hamper their ability to collect taxes.

[ChEAr$]

More flexible...not from what I have been reading. It appears that the IRS' future intent is to limit the type of returns a preparer can file based on whether that preparer has proven (passed a test) the ability to properly complete various types of returns. They have already separated 1040's with Sch C and without. I predict the next step will be the different types of business returns, and, maybe even, payroll, 1041 and 706.

And I predict IRS can't do anything further to implement their ill gotten gains re RTRP's. The ruling enjoined IRS from any further implementation.

[Uncle Sam]

IRS Loses Round 1

FINALLY - I agree with AZ-Tax - Hallelujah!!!!!!!!!!!!!!
You too, Matt.

This baloney of letting unlicensed practitioners prepare returns with no restrictions - other than a PTIN - just
has to stop. It ruins the playing field for ALL licensed preparers regardless of title.

[Matt Sova]

Sure to raise someone's ire.

I think that you should either be a CPA, EA or Attorney to complete a tax return, OR work for a CPA, EA or Attorney. Sorry, but if you are good at what you do you can pass the EA exam. Then maybe those that cannot achieve any designation will realize they either a) suck at tax prep or b) start charging reasonable fees instead of completing a return for a fraction of what any reasonable person would charge.