RTRP Exam Update!

The RTRP Exam and RTRP CE Requirements Are Currently Suspended

Loving Appeals Decision Issued

WASHINGTON, Feb 11 (Reuters) - A U.S. appeals court on Tuesday struck down the U.S. Internal Revenue Service's authority to regulate tax-return preparers, dealing a blow to the Obama administration, which has been trying to crack down on tax preparation fraud.

The unanimous decision from the U.S. Court of Appeals for the District of Columbia upheld a lower court ruling that invalidated test-taking and continuing education requirements that the IRS wanted to impose on hundreds of thousands of unregulated tax-return preparers.

"We agree with the District Court that the IRS's statutory authority ... cannot be stretched so broadly as to encompass authority to regulate tax-return preparers," the court's 19-page ruling said.

Updated February 11, 2014

Exam Fees Refunded

Fee amounts collected for scheduled registered tax return preparer test appointments canceled due to the court ordered injunction are being refunded. Additionally, fees collected from return preparers who tested on or after January 18, 2013, the date the test was enjoined, are also being refunded. No additional refund or reimbursement requests related to registered tax return preparer regulation are being provided or considered at this time. E-mail notifications will be provided to those receiving refunds to explain the process. No action is necessary to receive the refund. A credit for the test fee will automatically be made to the account used to pay the fee. It is anticipated that all refunds will be processed by July 19, 2013.

Updated May 16, 2013

IRS Files For Appeal

The IRS filed for an appeal on Friday, March 29, 2013. The brief the IRS filed argues: "The District Court erred as a matter of law in holding that 31 U.S.C. § 330(a)(1) unambiguously foreclosed the Secretary of the Treasury from regulating the practice of tax-return preparers, and, accordingly, erred in declaring the tax-return preparer regulations invalid and enjoining their enforcement."

Updated March 29, 2013 at 4:00 PM

IRS Denied Motion For Stay

The IRS was denied permission to the lift an injunction allowing the IRS to continue offering the RTRP exam. On March 27, 2013, the U.S. Court of Appeals ruled that "Upon consideration of the motion for stay pending appeal, the opposition thereto, and the reply, it is ordered that the motion for stay be denied. Appellants have not satisfied the stringent requirements for a stay pending appeal." In simpler terms, this ruling means that the IRS has not been given permission to reinstate the requirement that tax preparers complete mandatory exams (i.e., the RTRP exam) or continuing education.

Updated March 28, 2013 at 5:00 PM

IRS Will Appeal Suspension Decisions

On Monday, February 25, 2013, the IRS filed a 63-page motion for a Stay Pending Appeal. This aggressive motion makes it very clear that the IRS intends to appeal the lower court's injunction prohibiting the IRS from requiring the RTRP exam and CE for Registered Tax Return Preparers. We believe they will be successful. However, in our opinion, if the court does not rule favorably on the appeal, the IRS will seek legislative authority.

Without a doubt, the IRS fully intends to seek a remedy to reinstate the RTRP Exam and CE. While the RTRP Exam is not currently available, the court could lift the injunction and reinstate the exam and CE at any time. In order to be prepared, Gleim is in the process of updating our RTRP course completely with many improvements so that if the Appellate Court reinstates the Registered Tax Return Preparer program or the injunction is lifted, we will be ready to prepare you for a successful experience.

Remember for the RTRP Exam testing of 2011 tax law ends March 31, 2013, and testing of the 2012 tax law begins April 16, 2013.

Updated March 1, 2013 at 2:00 PM

PTIN System Now Open

On Friday, Feb. 1, the court modified its order of Friday, January 18, 2013, to clarify that the order does not affect the requirement for all paid tax return preparers to obtain a preparer tax identification number (PTIN). Consistent with this modification, the IRS has reopened the online PTIN system.

In addition, Judge Boasberg clarified that his injunction did not affect a separate set of regulations which required tax preparers to have a Preparer Tax Identification Number, (PTIN), or prevent the IRS from operating testing or continuing education centers on a voluntary basis only.

The court wrote today, "[S]ome preparers may wish to take the exam or continuing education even if not required to. Such voluntarily obtained credentials might distinguish them from other preparers."

Updated February 7, 2013 at 12:00 PM

RTRP Suspension Announced

According to the IRS:

As of Friday, January 18, 2013, the United States District Court for the District of Columbia has enjoined the Internal Revenue Service from enforcing the regulatory requirements for registered tax return preparers. In accordance with this order, tax return preparers covered by this program are not currently required to register with the IRS, 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.

The Internal Revenue Service, working with the Department of Justice, continues to have confidence in the scope of its authority to administer this program. It is considering how best to address the court's order and will take further action shortly. In the meantime, please remember to check the webpage at www.irs.gov/taxpros. As additional information becomes available, it will be posted there.

On January 23, 2013 the IRS filed a motion to suspend the injunction entered on January 18, 2013. The IRS stated in this motion that they intend to file an appeal within 30 days.

Updated January 23, 2013 at 11:00 AM

What If I Already Paid To Take The RTRP Exam?

The IRS has suspended all testing at this time. Therefore, even if you have paid all fees and/or scheduled your test date, you will not be able to take the RTRP Competency Test. As of January 24, 2013, the IRS has not commented on refunding any testing fees paid.

What You Should Do Now

Continue to take your 15 hours of continuing education (CE). While CE is voluntary right now, it may be required again if the IRS is able to appeal the decision with the court and reinstate the program in its original form.

Consider upgrading your RTRP system to the EA system (special rates are given for previous RTRP customers). The EA designation gives you many of the same rights as the RTRP designation. If you take the EA exam, you will have no need to take the RTRP exam (other than for marketing purposes) if it is reinstated. You can learn more about the EA exam and Gleim EA Review Systems.

Many candidates are choosing to finish their review of the RTRP course, understanding it covers content the IRS expects tax professionals to be current on. Many candidates are also choosing to complete their CE to stay up to date and increase their knowledge.

Do You Have Any Questions?

Team Gleim is here to help answer your RTRP exam and RTRP CE questions. We can also advise you on whether or not you should consider taking the EA exam. Please email us at accountingteam@gleim.com or call 800.874.5346.