Topic: Tax Audits
In late 2009, the IRS concluded a project to review the tax return preparation industry. The Return Preparer Review, Publication 4832, made several recommendations to extend IRS oversight over the previously un-regulated return preparer industry. Some of those recommendations included competency testing and minimum continuing education requirements.
Those recommendations, and their inclusion in revisions to IRS Circular 230, were subsequently challenged by 3 tax return preparers. At the District Court level, the court ruled against the IRS. In the District Court’s opinion, the IRS’s interpretation of the enabling statute did not stretch as far as they had hoped. After the IRS loss, an appeal was filed with the U.S. Court of Appeals for the District of Columbia. In the Loving v. IRS opinion filed on February 11, 2014, the court upheld the ruling against the IRS. The analysis of the Appeals Court focused in part on what it means to be a "representative" and "practicing before the IRS," and to what extent those activities are done by return preparers. Where the opinion leaves the ongoing battle by the IRS to regulate return preparers will be something many watch with great interest.
Kevan McLaughlin is a San Diego tax attorney, whose practice includes representing taxpayers before the IRS, Department of Justice, and more.
San Diego tax attorney Kevan McLaughlin discusses recent ruling from the U.S. Court of Appeals for the District of Columbia in Loving v. IRS.