The AICPA on July 15 filed a federal lawsuit against the Internal Revenue Service (IRS) in the U.S. District Court for the District of Columbia. The lawsuit challenges the IRS’s new rule regulating tax return preparers.
The AICPA has been a steadfast supporter of the IRS’s overall goals of enhancing compliance by tax return preparers and elevating ethical conduct. However, the IRS’s new rule regulating tax return preparers is an unlawful exercise of government power. By implementing a purportedly “voluntary” program that is mandatory in effect, the rule is an end-run around a judicial opinion which struck down the IRS’s earlier attempt to regulate tax return preparers. In addition, the rule will confuse consumers by creating four new categories of tax return preparers (for a total of eight). The new rule also does not address the problem of unethical or fraudulent tax return preparers.