A couple of weeks ago, we talked about the limited nature of the Internal Revenue Service this year because of sequestration in late 2013. In that post, we raised a few questions about the IRS in general — nothing more controversial than what critics have said before us. Given the massive task that the IRS is charged with (enforcing the revenue code and collecting taxes for the entire country), mistakes are bound to be made.

But sometimes, the IRS imposes or enforces rules that simply don’t make sense. Just such a case has arisen after the IRS tried to impose a new rule in 2011 that forced tax preparers to be certified.

The rule would have impacted hundreds of thousands of tax preparers, forcing them to pass a certification exam, pay annual fees and complete 15 hours of education courses to meet IRS requirements. This rule was the first attempt in 125 years by the IRS to regulate tax preparers — but a circuit court shot down the rule.

The rationale of the court was that a tax preparer does not represent the tax payer. Instead, the tax preparer assists the taxpayer — and the tax preparer still has to sign off on his or her tax return. The distinction is important because the “representation” claim by the IRS doesn’t hold water, given the way tax and revenue code treats tax preparation.

If you use a tax preparer for your return, make sure you are compliant with all rules and regulations that apply.

Source: Courthouse News Service, “IRS Lacks Authority to Regulate Tax Preparers,” Jack Bouboushian, Feb. 12, 2014

 

Leave a Comment:

Your email address will not be published.

Contact an Estate Planning, Business Law Or Tax Attorney Today

To set up a free, no-obligation consultation with one of our knowledgeable San Diego based estate planning, business and tax lawyers, or learn more about our tax preparation, accounting and business advisory services call us at 866-631-3470 or contact us.