AICPA Files Protectionist Lawsuit Against IRS over Annual Filing Season Program
Washington D.C. – The American Institute of Certified Public Accountants filed a lawsuit on Tuesday in the U.S. District Court for the District of Washington in an effort to interrupt the IRS’s voluntary Annual Filing Season Program (or AFSP). The AFSP allows unenrolled tax preparers to attain a Record of Completion by completing an Annual Federal Tax Refresher Course as well as the required number of AFSP Continuing Education hours in the year preceding the filing season. Tax preparers seeking to receive such record of completion for the 2015 filing season must complete the requirements by December 31, 2014. The AICPA is seeking to block the IRS program as an improper exercise of the IRS’s authority and a violation of the administrative procedure act due to the lack of notice and comment period.
This lawsuit appears to be little more than the AICPA seeking to protect the interests of its members. The AICPA asserts that the AFSP is merely an improper end around to circumvent the Loving decision, which held the RTRP program to be an invalid expansion of the IRS’s regulatory authority that lacked a statutory basis. Although, the primary reason the RTRP program was invalidated was the fact that the program was mandatory and applied to all tax preparers regardless of whether they practiced before the IRS. Under the program, any tax preparer who failed to meet the requirements was prevented from preparing tax returns, which the Loving court deemed to be an over-broad extension of the regulatory authority granted to the IRS under I.R.C. section 330.
The harm from the program for individuals who were unable to meet the requirements due to the increased costs of complying with the regulations was evident, albeit probably overstated in Loving. The harm to unenrolled tax preparers asserted by the AICPA in this case, on the other hand, is purely speculative as the program may actually be more helpful to such preparers than harmful. Absent the AFSP, unenrolled tax preparers have a difficult time competing with enrolled tax preparers like attorneys, enrolled agents and CPAs. More importantly, even if the AFSP does cause harm to enenrolled tax preparers, the harm is not a harm that is associated with the AICPA or its membership, which causes one to wonder whether the AICPA even has standing to bring this suit. It seems the AICPA would have trouble defeating a motion to dismiss based on lack of standing unless it advances its true reasons for bringing the lawsuit, such reason being to protect its members from another competing designation.
- See American Institute of Certified Public Accountants v. Internal Revenue Service, Civil Action No. 14-1190 (U.S. Dist. Ct. for Dist. of Columbia, filed July 15, 2014); AICPA sues IRS to stop return preparer program, by Alistair M. Nevius, J.D. (Journal of Accountancy, July 15, 2014); IRS Ignored Law in Tax Prep Program, Accountant Suit Says, by Sophia Pearson (Bloomberg, July 15, 2014); Accountants challenge IRS rule for tax preparers, by Benjamin Goad (The Hill, July 15, 2014); CPAs Sue IRS, Say its ‘Voluntary’ Regulation of Tax Preparers Lacks Authorization From Congress, by Paul Caron (TaxProf Blog, July 16, 2014) ↵
- See Loving et. al, v. Internal Revenue Service et. al, U.S. Court of Appeals for the District of Columbia Case No. 13-5061; See e.g. Appellate Court Upholds Loving v. IRS Decision Barring RTRP Regulations, by John Treu (Fuller TaxBlog, February 11, 2014.↵