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Current Events & Hot Topics Current Events & Hot Topics

IRS loses lawsuit in fight against tax preparers

Posted by on Jan. 19, 2013 at 8:25 AM
  • 19 Replies



FALLS CHURCH, Va. (AP) -- A federal judge on Friday barred the IRS from imposing a series of new regulations, including a competency exam, on hundreds of thousands of tax preparers.

U.S. District Judge James Boasberg in Washington ruled against the IRS in favor of three tax preparers who filed suit last year with the help of a libertarian legal group, the Arlington, Va.-based Institute for Justice.

Since 2011, in response to what it says has been a growing problem of poorly done returns, the IRS has sought to impose a series of new regulations on tax preparers. That included a requirement to pass a qualifying exam, paying an annual application fee, and taking 15 hours annually of continuing-education courses.

Attorneys and certified public accountants would have been exempt from the regulations.

The Institute for Justice argued that the IRS lacked the statutory authority to impose the regulations and said they would put tens of thousands of mom-and-pop tax preparers out of business, because the regulations were onerous and create a competitive disadvantage to the attorneys and CPAs who were exempt.

The judge's order includes an injunction that bars implementation of the regulations, which have been put in place on a piecemeal basis. The competency exam was to have taken effect in 2014.

Dan Alban, an Institute for Justice attorney, said the timing of the ruling is good because tax preparers who could have been put out of business will be able to work during the coming tax season.

"It is also good for the public at large because the cost of preparing a tax return was about to go up" as a result of the increased regulations, Alban said.

Alban called the IRS plan "an unlawful power grab by one of the most powerful federal agencies and thankfully the court stopped the IRS dead in its tracks."

The IRS argued in court that it not only had the statutory authority to impose the regulations, but also had the inherent authority to do so.

An IRS spokesman declined comment Friday on the judge's ruling.

The government can seek to appeal.

Paid tax preparers fill out 60 percent of all U.S. tax returns, according to a study from the Government Accountability Office, a congressional watchdog agency. The GAO has found significant problems over the years in the quality of work done by them. In one 2006 study, the GAO took tax returns to 19 different commercial tax preparers, and 17 of 19 incorrectly calculated the taxes due.

source

by on Jan. 19, 2013 at 8:25 AM
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Replies (1-10):
candlegal
by Judy on Jan. 19, 2013 at 9:28 AM
2 moms liked this

I love that someone finally put the IRS in their place.

UpSheRises
by Platinum Member on Jan. 19, 2013 at 9:31 AM

Yeah...'cause i want people who can't even pass a competency exam to do my taxes...have access to my personal information, and all that jazz.

Put them in thier place? Right...escaping having to hire qualified individuals to provide tax services really puts the IRS in it's place and doesn't a great job of protecting the public.

UpSheRises
by Platinum Member on Jan. 19, 2013 at 9:33 AM



Quoting candlegal:

The GAO has found significant problems over the years in the quality of work done by them. In one 2006 study, the GAO took tax returns to 19 different commercial tax preparers, and 17 of 19 incorrectly calculated the taxes due.

source

Why on earth would we try to fix a problem like that?


candlegal
by Judy on Jan. 19, 2013 at 9:39 AM

They are not all incompetent.   The person that does my taxes has never had a problem and I don't want to have to be held hostage to pay a premium because some are incompetent.   I honestly don't believe those figures anyway.   The IRS pays how many billions a year to illegals and other fraudulent people.  They need to concentrate on how to stop that and clean up their own house first.  I would have to say that is where the incompetence is.

Quoting UpSheRises:



Quoting candlegal:

The GAO has found significant problems over the years in the quality of work done by them. In one 2006 study, the GAO took tax returns to 19 different commercial tax preparers, and 17 of 19 incorrectly calculated the taxes due.

source

Why on earth would we try to fix a problem like that?



LoganTroyMom
by Bronze Member on Jan. 19, 2013 at 9:42 AM
i always like when the gov't loses.. but am i paying 100$ at H&R for some idiot???
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candlegal
by Judy on Jan. 19, 2013 at 9:50 AM
1 mom liked this

Personally I think there are more incompetent IRS people than tax preparers.

Quoting LoganTroyMom:

i always like when the gov't loses.. but am i paying 100$ at H&R for some idiot???


.Bubbles.
by Silver Member on Jan. 19, 2013 at 9:56 AM
Then you haven't dealt with many tax preparers.H&R Block pays their people poorly after minimal training. Many other tax preparation companies work this way. It isn't wrong to want people who are being paid to so someone's taxes to be qualified to do so.

Quoting candlegal:

Personally I think there are more incompetent IRS people than tax preparers.

Quoting LoganTroyMom:

i always like when the gov't loses.. but am i paying 100$ at H&R for some idiot???


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LoganTroyMom
by Bronze Member on Jan. 19, 2013 at 10:05 AM
I'm not disagreeing, but that also doesn't answer my question.

Quoting candlegal:

Personally I think there are more incompetent IRS people than tax preparers.

Quoting LoganTroyMom:

i always like when the gov't loses.. but am i paying 100$ at H&R for some idiot???


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Farmlady09
by Silver Member on Jan. 19, 2013 at 10:08 AM
1 mom liked this

Considering the living hell the IRS can put people through for mistakes on tax returns, I think that people should make darn sure that anyone doing their tax paperwork is competent. Honestly, I'm not sure who 'won' this one.

yourspecialkid
by Platinum Member on Jan. 19, 2013 at 11:24 AM
3 moms liked this

 I think the bigger picture in this vanished.  The tax code is too complicated for those that are not highly trained/educated.  THAT is the problem.  The average Joe should not have to pay a CPA $1000 to find out how much the IRS owes them in a refund.  He should be able to file a return himself. 

IMHO....if the IRS wants your money they should make it easy for you to figure out what you owe....and if they cannot...they should stuff it with their penalties and interest.

 

 

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