Tax Return Preparers Licensing

Posted on March 13, 2014

Do you think that tax return preparers should be licensed by the IRS?

The IRS previously attempted to essentially license tax return preparers, and then the tax return preparers filed suit stating that the IRS did not have this authority.

In a recent case, the U.S. Court of Appeals for the D.C. Circuit affirmed the decision striking down IRS rules aimed at establishing standards for paid tax return preparers. Although the court stated that regulating tax return preparers would be wise as a policy matter, the court held that that decision is up to Congress and the President if they wish to enact new legislation. The court found that the action by the IRS was a “classic case of regulatory overreach” and that “Congress never gave the IRS the authority to license tax return preparers and the IRS just can’t give itself that authority.” Do you think that tax return preparers should be regulated by the IRS? Is the current IRS credential oversight enough?

We feel that some oversight is necessary and will help avoid situations like the one involving Instant Tax Services. However, we do agree that this decision should be left to Congress and the President to enact new legislation.