A federal judge has refused to suspend his injunction barring the Internal Revenue Service from requiring unlicensed tax preparers to pass tests or take continuing education. However, late last week, U.S. District Court Judge Boasberg also said the ruling did not prevent the IRS from offering testing or continuing education centers on a voluntary basis. With that clarification in hand, the IRS reopened the PTIN system. The IRS had asked Boasberg to suspend the injunction because the impact would disrupt tax season. The IRS is expected to appeal.
The IRS had implemented a system required preparers to obtain a Registered Tax Preparer Identification Number and for paid preparers who are not Enrolled Agents, CPAs or attorneys to pass an examination and take CPE courses. Three preparers and the conservative Institute for Justice sued on the grounds that IRS did not have the authority to enact these rules and the judge agree.
In California, things are different. The California Tax Education council, a state-mandated nonprofit organization that registers unlicensed tax preparers, issued a statement noting that California state law requires registration. Those registered with the CTEC must complete 60 hours of qualifying education, obtain a $5,000 surety bond to protect clients against fraud, and complete 20 hours of CPE annually.
