IRS Has Reopened Online PTIN System with Limitations.
(Parker Tax Publishing: February 5, 2013)

On Friday, Jan. 18, 2013, the District Court for the District of Columbia in Loving v. IRS, 2012 PTC 10, enjoined the IRS from enforcing the regulatory requirements for registered tax return preparers. In accordance with this order, tax return preparers covered by this program are not required to complete competency testing or secure continuing education. The ruling does not affect the regulatory practice requirements for CPAs, attorneys, enrolled agents, enrolled retirement plan agents or enrolled actuaries. On January 23, the IRS filed a motion to suspend the district court’s injunction pending its appeal of the court’s decision. The IRS also shut down the RTRP exam testing system as of January 23, 2013, thus cancelling all exams from that date forward.

On February 1, 2013, the D.C. district court, in Loving v. IRS, 2013 PTC 13, rejected the IRS’s request to stay the injunction but did modify the injunction to make clear that the IRS is not required to suspend it PTIN program, nor is it required to shut down all of its testing and continuing-education centers; instead, they may remain, but no tax-return preparer may be required to pay testing or continuing-education fees or to complete any testing or continuing education unless and until the injunction is stayed or vacated by the D.C. Circuit Court of Appeals.

The district court rejected the IRS’s argument that no harm would be done if the court stayed the injunction. According to the court, the harm would be considerable because, if it stayed the injunction, then all preparers would be faced with a choice of either (1) skipping the registration requirements, gambling on an affirmance by the D.C. Court of Appeals or a reversal that would be issued early enough that they could still fulfill their requirements by the end of the year, or (2) satisfying the testing and continuing-education requirements, knowing that this might be wasted time, effort, and expense.

As a result of the court’s ruling, the IRS has reopened the online PTIN system with limitations. Preparers are alerted:

"The PTIN system is being updated to reflect current requirements. Until those updates can be completed, a screen titled Continuing Education (CE) Completion may appear during PTIN renewal."

"Problems with the PTIN sign up system may prevent assistive technology tools from being effectively utilized. If additional help is required, please contact the IRS Tax Professional PTIN Information Line for assistance in completing your application. We apologize for the inconvenience and hope to resolve the issue as soon as possible. (Staff Editor at Parker Tax Publishing)

Disclaimer: This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations. This analysis is not tax advice and is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer. The information contained herein is general in nature and based on authorities that are subject to change. Parker Tax Publishing guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. Parker Tax Publishing assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein.

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