Fate of IRS Tax Preparer Program Uncertain Following Court Shutdown

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The fate of IRS's tax preparer registration program is in limbo as the agency attempts to respond to a federal court injunction forcing it to permanently shut down the program. In Loving v. Internal Revenue Service, a federal district court rules that IRS did not have the authority to regulate preparers who had not been regulated before—namely preparers who were not certified public accountants, attorneys, enrolled agents, or enrolled actuaries. In granting declaratory and injunctive relief to three tax return preparers who argued IRS lacked the authority to regulate them, the court holds that the statute regulating taxpayer representatives did not authorize IRS to regulate tax return preparers. IRS says it is considering how best to address the court's order, and will take further action shortly. It says tax return preparers covered by the program “are not currently required to register with the IRS, to complete competency testing or secure continuing education.”