Monday, February 4, 2013

Certain Tax Return Preparers Freed from Exam and Continuing Education Requirements

Two weeks ago, individuals who assist with the filing of tax returns won a significant victory over the IRS. The lawsuit filed by three individual tax return preparers in March of 2012 charged that the IRS did not have the authority to require them to complete an exam and attend continuing education classes annually. These requirements had been enacted by the IRS in 2011, as a means of trying to ensure that those who are paid to assist others with the filing of their tax returns are competent to do so. However, the requirements placed a heavy burden on many small business preparers who were subjected to the rigorous requirements. For example, the fee to take the exam was $116.

On January 18, 2013, the United States District Court for the District of Columbia agreed with the plaintiffs and enjoined the Internal Revenue Service from enforcing the regulatory requirements for registered tax return preparers. In accordance with this order, tax return preparers covered by this program are not required to complete competency testing or secure continuing education. The ruling does not affect the regulatory practice requirements for CPAs, attorneys, enrolled agents, enrolled retirement plan agents or enrolled actuaries.

Two weeks after that decision of the District Court, on Friday, Feb. 1, the court clarified its order and said  that it does not affect the requirement for all paid tax return preparers to obtain a preparer tax identification number (PTIN). Consistent with this modification, the IRS has reopened the online PTIN system. The current PTIN sign-in page is being modified, so until then, those signing in as registered tax return preparers can answer however they choose when asked if they have completed the educational requirements.

For more information go to

To access the case Loving v. Internal Revenue Service, go to this link at


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