| WASHINGTON, June 26
WASHINGTON, June 26 The U.S. Internal Revenue
Service said on Thursday it will launch a voluntary education
program for tax return preparers, a step back from an earlier
mandatory program of testing and regulation that was halted by
The U.S. Court of Appeals for the District of Columbia ruled
in February that the IRS did not have the authority on its own
to impose rules on up to 700,000 preparers who are not already
licensed as attorneys, accountants or "enrolled agents."
The IRS had to mothball its mandatory program and ask
Congress for authority to reinstate it. Unless and until that
happens, a voluntary program will be run, IRS Commissioner John
Koskinen said on a conference call with reporters.
"About 60 percent of paid tax return preparers in the U.S.
operate without regulation or oversight," he said. "Although
many of them do a good job, we have found that others are poorly
equipped to assist taxpayers in preparing returns."
He said the IRS intends to have the voluntary program in
place by the beginning of the 2015 tax filing season.
Under the program, participating preparers would register
with the IRS and get a Preparer Tax Identification Number, take
18 hours of continuing education each year and a test.
Passing the test would earn preparers a record of completion
good for the filing season.
About a third of the $9.4 billion tax return business is
controlled by H&R Block Inc and three other large
companies. The remaining two-thirds is divided among licensed
and unlicensed preparers, many of them mom-and-pop operations.
The IRS took steps starting in 2011 to regulate unlicensed
return preparers for the first time, with a program requiring
thousands of them to meet testing and education requirements.
But independent preparers complained. Then in 2012, a
libertarian activist group called the Institute for Justice sued
the IRS, arguing that Congress never gave the agency authority
to regulate preparers.
(Editing by Jonathan Oatis)