Information for AICPA Members Regarding Lawsuit on IRS PTIN Program Fees
Thursday, October 13, 2016
Posted by: Amy Spencer
The AICPA is aware that many members have received a notice regarding a class-action lawsuit related to the IRS Preparer Tax Identification Number (PTIN) program fees.
The AICPA is not involved in the lawsuit and has no position regarding the class-action suit; however, here is background information for members.
In Adam Steele, et al. v. United States, a class action was filed in which the plaintiffs requested a judgment declaring that the IRS lacks authority to charge a fee for issuance or renewal of a PTIN, and even if the IRS is authorized to charge the fee, that fee is excessive and therefore invalid at its current level. The plaintiffs also requested restitution, i.e., that the IRS refund fees previously paid.
In February, the District Court for the District of Columbia certified the class regarding declaratory relief but ruled that certification was inappropriate for restitution. At that time, the court indicated that it would be willing to hear additional information regarding the second issue; the plaintiffs filed for reconsideration and in August, the court granted the request for certification regarding restitution. Affected PTIN holders are now receiving notification because of the court’s second ruling.
The options, as stated in the notification, are:
OPTION 1. Do nothing. Stay in the lawsuit.
OPTION 2. Exclude yourself from the lawsuit.
Individuals have until December 7, 2016 to make a decision.
In 2009, the IRS conducted a study to consider a preparer regulation program. Then-IRS Commissioner Shulman released his preparer regulation report at the end of December that year and moved forward in 2010 with proposed regulations to implement the program. Included in those regulations was a proposal to establish a user fee for the PTIN under Internal Revenue Code section 6109. The IRS started collecting fees in the fall of 2010. The initial fee was $64.50; renewals were $63.00. The renewal fee was dropped to $50.00 in the fall of 2015.
The AICPA has no position regarding the class-action lawsuit.
AICPA has been actively involved in discussions regarding preparer regulation since before then-IRS Commissioner Shulman conducted his study. AICPA testified at the section 6109 preparer regulation proposed regulations hearing, and has consistently questioned the amounts and use of the fees that have been collected.
The AICPA continues to support improved ethical standards and enhanced compliance for paid preparers, and has long advocated for Congress to mandate that the IRS enact a testing and continuing education program (similar to the registered tax return preparer program in effect prior to Loving v. IRS) to address the competency of unregulated, non-credentialed tax return preparers.