Appeals court denies IRS request for stay in return preparer regulation case

[Elrod]

By Alistair M. Nevius, J.D.

March 28, 2013

The IRS lost another round in its court battle to regulate tax return preparers when the U.S. Court of Appeals for the District of Columbia Circuit denied its motion to stay an injunction halting its return preparer regulation program, pending appeal of a lower court’s decision (Loving, No. 1:12-cv-00385-JEB (D.C. Cir. 3/27/13) (order)).

http://www.journalofaccountancy.com/News/20137681.htm

[Terry D EA]

In February, the IRS filed a Notice of Appeal to the D.C. Circuit and moved for a stay of the district court’s injunction, pending the outcome of the appeal. The appeals court has now denied that motion, keeping the injunction in place and preventing the IRS from reinstating its return preparer regulation program until the appeals court rules on the case. Oral arguments in the case have not yet been scheduled.

I agree with regulation but in the grand scheme of things, does it really matter? I have fixed quite a few returns preapred by CPA's and an attorney because they were prepared incorrectly. One this year a CPA had created the chartiable contributions just under the 5K to avoid the need for an appraisal. My client freely offered while doing a comparison from last year, "I don't know where he got that figure from". No amount of testing or level, amount of CEU's will ever prevent this from happening. I agree with IRS regualtions but it should be for all across the board.

[michaelmars]

.And why do you thing testing would help? the person can pass the test and then do the returns the way they want to anyway/

[Terry D EA]

Never said testing or anything else would help. No amount of testing, course work, update class, college classes, classes on ethics; etc will prevent someone from taking short cuts or engage in unethical practices. I did say the requirements should be across the board for all and just because you can put the letters CPA behind your name doesn't make anyone a tax guru who knows all and will do it correctly. As far as I am concerend, the three folks who brought the initial law suit probably couldn't pass the test. As I said somewhere else, you wouldn't go to a brain surgeon who couldn't pass a test would you? Even if the brain surgeon passed all required tests, this doesn't make him immuned to mistakes or unethical practices. One significant difference is the brain surgeons mistakes get buried, ours just cost money and can be fixed.

[GeorgeM]

I have 5 clients from one family due to a CPA not taking depreciation on rental property.

On 2 of them I had to go back 2 years to get the depreciation and get them a good refund.

My main concern is that preparers like HRB and Jackson only have to have one person in the office who can sign returns, and the other preparers don't have to know anything.