The AICPA has filed a lawsuit in the U.S. District Court for the District of Columbia seeking to stop the IRS’s Annual Filing Season Program tax preparer program on the grounds that the IRS does not have the authority to implement such a program (Am. Inst. of Certified Pub. Accountants v. IRS, D.D.C., No. 14-1190, 7/15/14). The lawsuit seeks declaratory and injunctive relief. It asks the court to declare the program unlawful and keep the IRS from implementing any action related to it.
The AFSP will allow tax return preparers who are not attorneys, CPAs, or EAs to get a record of completion when they voluntarily undergo a required amount of continuing education and pass a comprehension test. AFSP participants will also be included in a public database of return preparers scheduled to launch on the IRS website by January 2015. The Directory of Federal Tax Return Preparers with Credentials and Select Qualifications will include the name, city, state, zip code, and credentials of all attorneys, CPAs, enrolled agents, enrolled retirement plan agents and enrolled actuaries with a valid PTIN, as well as all AFSP – Record of Completion holders.
The AICPA says it opposes the AFSP because it is an end-run around the Loving v. IRS court decision in February that struck down the IRS's mandatory tax preparer program. “The IRS simply does not have the authority to proceed with the new rule,” AICPA President and Chief Executive Officer Barry Melancon said in a July 15 news release announcing the lawsuit. He went on to say the AFSP is a “de facto mandatory program” because it creates a strong competitive incentive for unenrolled tax return preparersundefinedthose that are not CPAs, attorneys, or enrolled agentsundefinedto comply.
A number of NSA members have reported that no unenrolled preparers have expressed the view that the benefits of the AFSP are so great that they feel they would have to volunteer or be at some sort of competitive disadvantage. Furthermore, they state that the tax return preparation business for small practitioners thrives on word of mouth advertising (“Who is your tax return preparer? Is she good?”) that would be unaffected by the AFSP. So, we have to question whether the AFSP is as “de facto mandatory” as the AICPA seems to think. We have also heard from a number of CPA members of NSA who question why the AICPA cares about the AFSP, given that its members are exempt from the program, and why AICPA is using their dues dollars on this.
While NSA has concerns about the AFSP, specifically with the implementation of the testing provision and making appropriate distinctions between AFSP participants and credentialed practitioners, such as CPAs and EAs, we do not oppose the program. Rather, NSA’s view remains that those members who are unenrolled are sufficiently competent to determine for themselves whether participation in the AFSP would be a benefit to their business and, if so, whether they want to volunteer or not.
A copy of the AICPA lawsuit is available here.
