* Order spares tax preparers from taking tests, paying fees
* IRS allowed to keep program intact for now, judge orders
By Patrick Temple-West
Feb 1 A U.S. judge on Friday modified an earlier
order and said the Internal Revenue Service does not have to
shut down a new program for registering and testing tax
preparers, but he also said preparers need not take IRS tests or
pay related fees.
Moving to freeze both sides in a dispute over the IRS
program, Judge James Boasberg of the U.S. District Court for the
District of Columbia effectively made it voluntary for about
350,000 non-professional tax preparers to take new IRS exams and
continuing education. The IRS had sought to make this mandatory.
A libertarian group last year contested the IRS' authority
to do this and Boasberg initially agreed, issuing an order on
Jan. 18 that threw the tax preparation industry into disarray.
With only days left before the start of this year's tax
season, preparers were left to wonder whether or not they would
have to take the new IRS test, pay fees and take other steps to
comply with the agency's rules, representing the IRS' first
attempt to regulate the tax return preparation industry.
A spokesman for the IRS did not immediately have a comment
on the judge's decision late on Friday. The IRS has said
previously that it planned to appeal the judge's earlier ruling.
Boasberg said that tax preparers do not need to take the
test or pay the fee, but he said they do need to apply for and
obtain registration numbers from the IRS.
Moreover, he said, the IRS does not need to dismantle the
program the agency already has spent millions of dollars on.
"Shutting down the program would be costly and complex, and
such steps would be rendered unnecessary if the court's decision
is reversed" on appeal, Boasberg said in his order.
Friday's ruling was applauded by the Institute for Justice,
the libertarian advocacy group that is representing three tax
preparers who filed a lawsuit last year challenging the IRS.
The IRS program and Boasberg's orders have effected many
industry participants, ranging from "mom and pop" businesses to
employees of large companies such as H&R Block Inc and
Jackson Hewitt Tax Service Inc.