In January of 2013, a federal Court Judge ruled that Congress had never granted the IRS authority to regulate tax return preparers, and in February of this year, the US District Court of Appeals for the District of Columbia Circuit agreed.  Writing on behalf of the court, Judge Kavanaugh summarized, “We agree with the District Court that the IRS’s statutory authority under Section 330 cannot be stretched so broadly as to encompass authority to regulate tax-return preparers. We therefore affirm the judgment of the District Court.” 

Further appeal was seen as unlikely as there was no disagreement between the district and appeals court. In addition, IRS Commissioner, John Koskinen, previously indicated in several interviews and testimony before Congress that, though the IRS was still reviewing options, a Voluntary Program seemed the best approach moving forward. “The idea of a voluntary program is under consideration because we believe it is important to maintain the momentum for regulation and oversight of unregulated preparers that has built up over the last five years, and to lessen the risks to taxpayers resulting from the lack of federal education requirements.“

You may read the full text of IRS Commissioner Koskinen’s April 8th testimony before Congress below: