The United States Court of Appeals for the District of Columbia Circuit has ruled that 31 U.S.C. Sec. 330 does not grant the IRS authority to regulate tax return preparers. In so finding, the Court of Appeals affirmed the January 18, 2013, District Court for the District of Columbia decision analyzed here.
Loving, et al. v. Internal Revenue Service, et al., No. 13-5061, 2014 U.S. App. LEXIS 2512 (D.C. Cir. Feb. 11, 2014), aff'g., 917 F. Supp.2d 67 (D. D.C. Jan. 18, 2013)(31 U.S.C. Sec. 330 does not authorize IRS to regulate tax return preparers; during first 127 years of statute, executive branch never interpreted statute to allow such regulation; trial court held that statute and context "unambiguously foreclose the IRS's interpretation" of the statute; tax return preparer is not a "representative" of persons before Treasury Department; tax return preparer does not "practice" before the IRS; history of legislation illustrates total inapplicability to tax-return preparation which did not exist at time of enactment; Congress has already enacted a separate set of statutes applicable to tax-return preparers and if statute at issue construed as IRS desires those other statutes would be gutted; nothing in statute or legislative history indicates vast expansion of IRS's authority over hundreds of thousands of individuals in huge industry; IRS never in the past interpreted statute in such fashion or even suggest it had such authority; IRS's interpretation of statute so arbitrary and capricious that IRS position not entitled to deference).
The United States Court of Appeals for the District of Columbia Circuit has ruled that 31 U.S.C. Sec. 330 does not grant the IRS authority to regulate tax return preparers. In so finding, the Court of Appeals affirmed the January 18, 2013, District Court for the District of Columbia decision analyzed here.
Loving, et al. v. Internal Revenue Service, et al., No. 13-5061, 2014 U.S. App. LEXIS 2512 (D.C. Cir. Feb. 11, 2014), aff'g., 917 F. Supp.2d 67 (D. D.C. Jan. 18, 2013)(31 U.S.C. Sec. 330 does not authorize IRS to regulate tax return preparers; during first 127 years of statute, executive branch never interpreted statute to allow such regulation; trial court held that statute and context "unambiguously foreclose the IRS's interpretation" of the statute; tax return preparer is not a "representative" of persons before Treasury Department; tax return preparer does not "practice" before the IRS; history of legislation illustrates total inapplicability to tax-return preparation which did not exist at time of enactment; Congress has already enacted a separate set of statutes applicable to tax-return preparers and if statute at issue construed as IRS desires those other statutes would be gutted; nothing in statute or legislative history indicates vast expansion of IRS's authority over hundreds of thousands of individuals in huge industry; IRS never in the past interpreted statute in such fashion or even suggest it had such authority; IRS's interpretation of statute so arbitrary and capricious that IRS position not entitled to deference).