Karen Hawkins is the Director of the Office of Professional Responsibility (OPR). OPR is the agency within the IRS that is in charge of preparer regulation and oversight; their vision is, “To be the standard-bearer for integrity in tax practice;” their mission is to, “Interpret and apply the standards of practice for tax professionals in a fair and equitable manner.”
I was a little surprised this evening to see that Ms. Hawkins commented on my post of earlier this week titled, “The IRS Apparently Thinks They Won the Loving Case.” Ms. Hawkins stated,
As the “owner” of Form 2848, I’d like to clarify what Loving did and did not say: IRS was enjoined from requiring a test be taken and passed before a PTIN could be obtained, and from requiring annual CPE in order to renew the PTIN. The District court also acknowledged that the IRS could register/license individuals on a voluntary basis. Nothing in the decision addressed the use of the RTRP designation. In fact, those who passed the RTRP exam before the injunction (nearly 75000) are being exempted from the annual federal update requirement put in place by the new voluntary record of completion program (see Rev Proc 2014-42). The President has also put forward a legislative recommendation to amend 31 USC 330 to provide for mandatory regulation of return preparers. This is a difficult issue to address in black and white terms but please don’t assume the IRS can’t figure out what the law says and doesn’t say.
I felt that Director Hawkins’s view on this deserved a wider audience than a comment on a previous blog post. (The comment would not be seen unless someone clicked on the post itself.)
I did not know that, as Ms. Hawkins states, “…those who passed the RTRP exam before the injunction (nearly 75000) are being exempted from the annual federal update requirement put in place by the new voluntary record of completion program (see Rev Proc 2014-42).” Ms. Hawkins is referring to the new “Annual Filing Season Program.” I should point out that it’s unclear whether this program will be in place for next tax season; the AICPA has filed a lawsuit seeking to enjoin the IRS from offering this program.
Here is the actual Court Order that Judge Boasberg issued in Loving v. IRS:
For the reasons set forth in the accompanying Memorandum Opinion, the Court ORDERS that:
1. Plaintiffs’ Motion for Summary Judgment is GRANTED;
2. Defendants’ Motion for Summary Judgment is DENIED;
3. Defendants lack statutory authority to promulgate or enforce the new regulatory scheme for “registered tax return preparers” created by 76 Fed. Reg. 32,286;
4. Defendants are permanently enjoined from enforcing such scheme; and
5. Judgment is ENTERED in favor of Plaintiffs.
SO ORDERED. [emphasis in original]
Ms. Hawkins is technically correct that Judge Boasberg’s order says nothing about the use of an RTRP designation. However, the Order specifically states that the IRS has no authority to create such a regulatory scheme. If there isn’t such a regulation, what’s the use of the designation?
I do want to point out that Ms. Hawkins has a sometimes thankless job. As I’ve noted on numerous occasions, there are plenty of bad tax “professionals” out there. (As I frequently state when I comment on such professionals, if it sounds too good to be true it probably is.) Ms. Hawkins and her staff have the task of trying to ensure competency among tax professionals. Unfortunately, her job is never-ending and thankless.