PTIN Fees: Don't hold your breath for a refund

[Koss]

I'm starting a new thread, because the other one is getting a little unwieldy. And this is a somewhat more narrow topic.

In the earlier thread, DaveO wrote:

I'm just waiting for the class action suits to begin for those who seek to recover their filing fees.

It's not clear what DaveO is referring to by filing fees, but it sounds like he's talking about the annual fee for a PTIN.

When I first read the district court opinion, I thought that the registration and renewal fees for the PTIN might have been struck down. But they have not. The PTIN fees are not affected by the decision in Loving et al. v. IRS et al.

The Loving decision declares that the IRS cannot require an exam or continuing education for tax return preparers. It follows, therefore, that the IRS cannot decline to issue a PTIN to someone who has not passed the exam or completed the continuing education. But the decision does not stop the IRS from charging a fee to issue or renew the PTIN.

The PTIN fees were the subject of a different case: Jesse E. Brannen, III, P.C., et al. v. United States of America.

Brannen is an attorney in Georgia. He filed suit in federal district court, asserting that the IRS lacked statutory authority to collect a fee for the issuance or renewal of a PTIN.

He lost.

He appealed, and lost again.

Here's the appellate court ruling:

http://www.ca11.uscourts.gov/opinions/ops/201114138.pdf

He appealed again.

And on November 5, 2012, the United States Supreme Court declined to hear the case.

PTIN fees are probably here to stay.

Now, the RTRP exam fee...

That's a different matter.

Since the IRS lacks the authority to require the exam, then those who have taken it may be entitled to a refund of the fee.

And if you purchased continuing education from the IRS...

Hmmmmm?

There's a lot at stake here. But the PTIN fees are not going away any time soon.

BMK

[Bees Knees]

I disagree with the opinion that IRS lacks statutory authority to require a competency exam or CPE.

IRC §6109(a) says IRS has the statutory authority to issue regulations concerning the identifying numbers of paid preparers. This code section allows taxpayers to use their Social Security numbers, but it does not say tax preparers can use their Social Security number. On the contrary, the code says IRS can issue regulations concerning what number the paid preparer must use.

The Court of Appeals considered this code section when ruling IRS has the statutory authority to charge a user fee to obtain a PTIN. Since IRS has the statutory authority to issue regulations concerning the use of PTINs by paid preparers, it is only logical to conclude such regulations could in fact require continuing education and competency exam requirements as a condition for obtaining a PTIN. I am suprised this was never brought up in the Loving case.

BTW: A District Court decision has never stopped IRS before. How many District Court and Appellate Court decisions have been issued concerning gay marriage, and yet IRS continues to ignore those decisions. Only the Supreme Court has any authority to tell IRS what to do.