IMPORTANT! IRS RTRP Regulations Shot Down in Court!
Released yesterday was news the tax preparers, along side a libertarian justice group, won it’s case against the IRS. Essentially, the lawsuit challenged the IRS, stating that it had no right to impose such regulations on tax preparers and that it was giving itself more authority than it had. The judgement opinion was that until congress gave the IRS the authority to impose such regulations, it could enforce new regulation.
This is a court case with serious important implications on each side of the debate. On one side, if congress has not given the IRS authority, it can not grant it to itself. Overreaching on powers already granted is a slippery slope that could lead toward great public dissension and calls of tyranny (considering it’s the tax system and new regulations impost additional costs on preparers). However, it does seem logical that this would save taxpayers’ dollars (in audits, corrections, and reviews) by assuring a higher degree of knowledgeable tax return preparation.
On the other side, if there is no system to require competence in preparation, the fraud will continue. No question. 20 billion dollars goes out a year in fraudulent claims. Now, it is unlikely the illegal flow of free money will end, unless the IRS begins to investigate return preparers and make examples out of the unscrupulous ones. It’s sad to think such a potentially unlawful regulation was so needed to save taxpayer money and prevent IRS agents’ time to correct mistakes made by preparers who had no previous experience of tax preparation or even a care to do the job well.
No wonder former Commissioner Shulman left office. His dreams of improving the system through education was a bunch of smoke in mirrors. Congress can grant itself the power to increase their wages without repercussion, but the IRS can not create and enforce industry standards to protect itself, taxpayers, and the economy? This is only the beginning. I said it would be a bloodbath, but even I wasn’t expecting this plot twist!
Posted: January 19, 2013