Month: June 2014

DELRAY BEACH, Fla. — The case that began in 2012 when three tax preparers decided to take on the IRS reached its conclusion this month when the IRS did not exercise its option to seek a review of the case by the Supreme Court. Now that the deadline has passed, the issue can finally be put to rest and tax preparers around the country can breathe a sigh of relief. The IRS will not be able to require independent tax preparers to go through a licensing program which many within the industry perceived to be onerous.

The background to the case is interesting; the IRS proposed that it had the authority to regulate tax preparers under the “Horse Act” of 1884. This statute was created to regulate compensation claims for dead horses brought by civil war veterans but was used a means to put forward licensing requirements for tax preparers in the 21st century. The three tax preparers who took on the IRS—Sabina Loving of Chicago, Ill., Elmer Kilian of Eagle, Wis., and John Gambino of Hoboken, N.J. argued that the IRS could not use this 19th century legislation without the approval of Congress.

The proposed licensing would have affected hundreds of thousands of tax preparers across the United States and it was argued that it would have benefited special interests over independent tax preparation offices. Ultimately the IRS did not obtain congressional approval and declined their opportunity to take the case to the Supreme Court.

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