Accountants challenge IRS rule for tax preparers

The American Institute of CPAs (AICPA) filed a lawsuit Tuesday challenging an Internal Revenue Service proposal to impose voluntary education standards for tax preparers.

The lawsuit, filed in U.S. District Court for the District of Columbia, accuses the IRS of exceeding its authority in pushing forward with regulations that amount to a de facto requirement in the guise of voluntary guidelines.

“[T]he IRS’s new rule regulating tax return preparers is an unlawful exercise of government power,” said AICPA President and CEO Barry C. Melancon.

The dust-up follows the agency’s failed bid to enact mandatory regulations designed to crack down on unscrupulous and unqualified tax preparers. 

In February, a federal appeals court blocked that effort, concluding in a case known as Loving v. IRS that the agency overreached by trying to implement continuing education requirements for hundreds of thousands of tax return preparers.


The IRS decided against asking the Supreme Court to take up the case, with Commissioner John Koskinen suggesting a voluntary certification program could be in order.

The AICPA contends that even voluntary standards would be viewed as mandatory within the industry, and called the move an “end-run around Loving v. IRS.”

“Worse yet, the new rule will do nothing to address the problem of unethical or fraudulent tax return preparers — which should be a top priority,” Melancon said.

The group is calling on the IRS to withdraw the plan.