NATP Special Alert - The IRS announced the suspension of PTIN registration and renewal as a result of a court ruling on June 1, 2017, where the U.S. District Court for the District of Columbia granted the Plaintiffs' Motion for Summary Judgment in part, ruling that the IRS may continue to require PTINs, but may not charge fees for the issuance or renewal of PTINs.
As a PTIN holder, you are automatically part of the class action suit unless you requested exclusion prior to December 7, 2016. Any potential refund of PTIN fees is contingent on the outcome of an IRS appeal, if filed.
The IRS is working with the Department of Justice and is determining how to proceed. As additional information becomes available, it will be posted at irs.gov/taxpros.
As a member of NATP, National will keep you posted as new developments occur.
Background
In 2010, the IRS attempted to regulate both credentialed and uncredentialled tax return preparers by promulgating regulations that established a new registered tax return preparer (RTRP) designation. The regulations required individuals other than enrolled agents, attorneys and CPAs to pass a one-time competency exam, pass a suitability check, and obtain and pay for a PTIN. The regulations also required continuing education and the annual renewal of the PTIN for all paid preparers.
In 2014, the D.C. Circuit addressed the regulations regarding the exam and education requirements, asking whether the IRS possessed the statutory authority to regulate tax preparers [Loving v. IRS., 742 F.3d 1013, 1015(D.C. Cir. 2014)]. The Court ruled that the IRS did not have that authority. After Loving, the only part of the regulations that remained was the PTIN requirement. Soon after, a group of preparers filed suit alleging the IRS did not have the authority to require a PTIN, much less charge a fee for obtaining it. As communicated in the November 22, 2016, TAXPRO Weekly, the Court allowed the current class action lawsuit.
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