Independent Tax Preparers Win Lawsuit against IRS Licensing Requirements

The end of Loving v. IRS has arrived, after the Internal Revenue System (IRS) declined to file a petition to the US Supreme Court, as reported by the Institute for Justice on Tuesday. The agency could have sought a review of the D.C. Circuit Court of Appeals ruling on January of 2013 that the IRS had no legal authority to impose a nationwide licensing scheme on tax-return preparers, but chose not to.

This case arose when the agency required all tax-return preparers to obtain a license and submit to ongoing, mandatory IRS-approved education. Three independent tax preparers filed suit in March 2012, arguing that the IRS exceeded the scope of its authority by attempting to enact regulations that required approval from Congress.

US District Court Judge James Boasberg agreed and struck down the regulations in 2013, saying the federal agency had no authority for unilaterally imposing it under the 1884 Horse Act (a statute to determine compensation claims for Civil War veteran’s dead horses).

Some 350,000 tax-return preparers would have been affected had the licensing scheme not been struck down.

Source: Institute for Justice.

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