Trial Date Set for IRS Appeal of Tax Preparer Lawsuit

A federal appeals court in Washington, D.C., has scheduled oral arguments for September 24 to hear the Internal Revenue Service’s appeal of Loving v. IRS, the case in which a trio of independent tax preparers successfully sued the IRS to suspend its mandatory testing and continuing education requirements for tax preparers.

Three preparers—Sabina Loving of Chicago, John Gambino of Hoboken, N.J., and Elmer Kilian of Eagle, Wis.—won a victory against the IRS in January when U.S. District Court Judge James E. Boasberg ruled in their favor and found the IRS had exceeded its statutory authority in imposing its Registered Tax Return Preparer requirements (see Court Rules IRS Doesn’t Have the Authority to Regulate Tax Preparers).

The IRS appealed, and Judge Boasberg clarified the ruling in February, enabling the IRS to re-open its Preparer Tax Identification Number, or PTIN, online registration system for tax preparers. The judge also clarified that tax preparers could take competency tests and continuing education courses on a voluntary basis, but they would not be required to do so while his injunction remained in place (see Court Modifies Ruling Invalidating Tax Preparer Regulations). An appeals court in the District of Columbia later rejected the IRS’s request to lift the injunction, pending its appeal of the judge's decision (see Appeals Court Refuses to Lift Injunction against IRS Tax Preparer Regulation).

The same appeals court, the U.S. Court of Appeals for the D.C. Circuit, has now scheduled oral arguments in the case for September 24. Up to now, the case has largely been argued and appealed in the form of legal briefs from the plaintiffs' and defendants' legal counsel, along with amicus briefs from supporters on either side, but the trial date will give the two sides a chance to air their views in court.

Dan Alban, the lead attorney on the case at the Institute for Justice, a libertarian law firm in Arlington, Va., which successfully represented the three tax preparers in their lawsuit against the IRS, is looking forward to the trial before the appeals court.

“As we’ve said since we first filed this case, Congress never gave the IRS the authority to license tax preparers, and the IRS cannot give itself that power,” Alban said in an email Tuesday. “The district court judge agreed that the IRS had overstepped its authority, and we look forward to making our case before the D.C. Circuit.”