Latest news on the IRS Testing Ruling

[kcjenkins]

In the IRS’s legal brief in support of its motion, the agency admitted it had already received “over $100 million” in user fees from tax preparers, while only spending about $50 million to implement the regulations. But the IRS objected to spending the much smaller sum of $238,000 simply to notify tax preparers of the judge’s ruling in this case.

“One of the main things where the IRS claims there’s a harm is that there are all these tax return preparers who have paid various fees to the IRS in order to take the exam and get this licensing, and they’re going to be bringing lawsuits, possibly class-action lawsuits, for refunds of those fees,” said Alban. “Well, if the judge suspends the injunction, that means all that many more tax preparers will have to pay all those many more fees, and the government’s liability will only increase under that regime. Essentially the government is saying, ‘Look, we’ve created this class of victims who are paying these fees, and now we want to continue to expand this group of victims and make them pay even more fees.’ The argument just doesn’t hold weight.

“The safest thing to do at this point and the thing that makes the most sense is just to freeze things as they are right now, let the appeal proceed, and if the appeals court reverses the district judge, then the IRS can proceed implementing its regulations just as it was doing before and won’t have to worry about an extra year or more of refund claims for these fees,” he added.

In its brief, the IRS argued that thousands of tax preparers would undoubtedly continue studying for and attempting to take the RTRP competency exams, and the IRS would have to undertake an extensive and costly outreach program to attempt to notify those who had already registered and received a preparer identification number. That aspect alone of shutting down the program would cost at least $238,000, the IRS estimated, not including the costs associated with modifying or breaching vendor contracts, shutting down computer systems, and finding other positions for the 167 IRS employees currently working on the return preparer project.

Judge Boasberg will initially hear the IRS’s motion, but Alban doubts the judge will change his mind.

“Their motion for a stay will initially at least be heard by the same judge who ruled against them last week,” Alban told Accounting Today last Friday. “They’re asking that judge to essentially suspend his judgment on the issue of the injunction and suspend the injunction so that the regulations would continue to be in effect while the IRS appeals the case.”

[fhnunez]

I live in NY city and was supposed to take the test at the end of the month. I just got a call with a recording that says the test is suspended because of some injunction by a demand presented by the district of Columbia to the IRS. I knew about the injunction weeks ago but this the first time that I hear that this will affect the taking of the test. Had anybody heard more about this?

[Lion EA]

Testing was suspended due to the court decision.