Court Nixes IRS Bid to Reinstate Rules for Tax Preparers

March 29, 2013

The U.S. Internal Revenue Service this week lost a request to prevent the partial shutdown of its tax return preparer regulatory program pending an appeal.

In a one-page ruling, the U.S. Court of Appeals for the District of Columbia on Wednesday said the IRS had “not satisfied the stringent requirements” to overturn a lower-court judge’s injunction against the IRS’s new return preparer regulations.

The IRS had hoped to continue, pending an appeal, requirements for test-taking and continuing education that affect thousands of individuals who prepare tax filings.

An IRS spokesman did not immediately have a comment on Wednesday. The IRS has argued it will cost millions of dollars to stop the program.

No date for oral arguments has been scheduled yet for an appeal in this case.

The rules were part of the IRS’s first attempt to regulate the tax return preparation industry.

A federal judge in February affirmed an earlier injunction to stop the testing and education portion of the IRS’s return preparer regulatory program.

Return preparers who do not have professional licenses still need to register with the IRS.

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