Tuesday, November 22, 2011


As a belated follow up to my post “Practice Vs Represent” Enrolled Agent Hal Leahy has sent me the following email -

It took a while to find it but here is the IRS's justification for including tax preparation under representation {highlight is mine – rdf}

"The IRS believes that increased oversight of paid tax return preparers does not require additional legislation. As discussed more fully below, the IRS’ intention is to require paid tax return preparers to register with the IRS through the issuance of regulations under section 6109 of the Internal Revenue Code. Further, the IRS considers the preparation of a tax return for compensation as a form of representation before the agency. Thus, the IRS intends to amend the regulations under 31 U.S.C. 330 to clarify that any person preparing a tax return for compensation is practicing before the agency and, therefore, must demonstrate good character, good reputation, and the necessary qualifications and competency to advise and assist other persons in the preparation of their federal tax returns."

IRS Return Preparer Review, Publication 4832 (Rev. 12-2009) Catalog Number 54419P, Department of the Treasury Internal Revenue Service, page 33.

Once a regulation is final, Congress can overturn it. The regulations related to the Return Preparer Initiative (RPI) were finalized in several IRS regulations and Circular 230. Congress held hearings on the RPI and did not overturn any of them. Therefore the regulations are law.

It would take a federal court case to overturn them. That is unlikely given the Supreme Court's Chevron or Administrative Deference Doctrine.

See Wikipedia Chevon ...

So tax preparation is practice before the IRS, unless a federal court states otherwise. The latter outcome is unlikely.

Hal Leahy EA

My response to Hal – The DFBs (clean version = damned fool bureaucrats).


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