Suit Challenges IRS Right to Collect PTIN Fees

Two CPAs have filed suit against the Internal Revenue Service claiming its collection of annual fees for Preparer Tax Identification Numbers is not legal. Minnesota CPA Adam Steele and Georgia CPA Brittany Montrois seek to have their litigation certified as a class action suit. The plaintiffs are seeking to have the fees halted and receive refunds on those paid since they were implemented in 2010.

The IRS plan to require tax preparers be regulated was thrown out by a federal court early in 2013 and an appeal court agreed later the agency lacked the authority to enforce such regulations. CPAs, Enrolled Agents and tax attorneys were exempt from proposed requirements for competency testing and mandate education courses. However, the court rulings let the PTIN requirements stand, following the litigation brought by another group of preparers.

This year, the IRS began rolling out a voluntary plan for education and registration. That is being contested in court by the American Institute of CPAs, which says the IRS also lacks the authority to implement those procedures.

In the latest case, the plaintiffs are arguing that only a small portion of the PTIN fees are being used for that process and that the remainder are going to other IRS activities and therefore represent an illegal tax.