The fallout from Loving v. Commissioner continues.
James C. Section is a disbarred attorney who was working as a tax return preparer for Esquire Group LLC. The IRS Office of Professional Responsibility learned of his employment and sent a letter demanding he stop and that his employer provide certain documents. Rather than comply with the letter, Sexton and Esquire filed a complaint in May 2013 requesting a declaratory judgment that:
- Sexton isn't a practitioner, and Hawkins and the IRS lack authority over him; and
- The IRS is prohibited from regulating tax advice generally excepted as provided in 31 USC Section 330.
Judge Richard F. Boulware II of the U.S. District Court for the District of Nevada granted an injunction on Oct. 30 against Karen Hawkins, director of the IRS Office of Professional Responsibility, barring Hawkins from:
- suspending or curtailing James C. Sexton Jr.'s ability to electronically file tax returns on behalf of clients of his employer; or
- suspending Sexton's preparer tax identification number (PTIN) for not complying with the IRS's demands pending a determination of whether the IRS has authority over Sexton and Esquire.
Judge Boulware further ordered that Sexton and his employer are not required to produce documents for or respond to inquiries by the IRS (Sexton v. Hawkins, D. Nev., 2014 BL 307343, No. 2:13-cv-00893, injunction granted 10/30/14).
Although Sexton's complaint referenced the injunction against the enforcement of tax preparer regulations under Circular 230 in Loving v. IRS, 950 F. Supp. 2d 108, 2013 BL 27364 (D.D.C. 2013), affirmed 742 F.3d 1013, 2014 BL 36052 (D.C. Cir. 2014). Boulware didn't cite Loving but said Sexton and Esquire pleaded sufficient facts to raise the question whether Sexton remained subject to the IRS's jurisdiction since he was merely a tax preparer and not acting in a representative capacity.
The fallout from Loving v. Commissioner continues.
James C. Section is a disbarred attorney who was working as a tax return preparer for Esquire Group LLC. The IRS Office of Professional Responsibility learned of his employment and sent a letter demanding he stop and that his employer provide certain documents. Rather than comply with the letter, Sexton and Esquire filed a complaint in May 2013 requesting a declaratory judgment that:
·?Sexton isn't a practitioner, and Hawkins and the IRS lack authority over him; and
·?The IRS is prohibited from regulating tax advice generally excepted as provided in 31 USC Section 330.
Judge Richard F. Boulware II of the U.S. District Court for the District of Nevada granted an injunction on Oct. 30 against Karen Hawkins, director of the IRS Office of Professional Responsibility, barring Hawkins from:
- suspending or curtailing James C. Sexton Jr.'s ability to electronically file tax returns on behalf of clients of his employer; or
- suspending Sexton's preparer tax identification number (PTIN) for not complying with the IRS's demands pending a determination of whether the IRS has authority over Sexton and Esquire.
Judge Boulware further ordered that Sexton and his employer are not required to produce documents for or respond to inquiries by the IRS (Sexton v. Hawkins, D. Nev., 2014 BL 307343, No. 2:13-cv-00893, injunction granted 10/30/14).
Although Sexton's complaint referenced the injunction against the enforcement of tax preparer regulations under Circular 230 in Loving v. IRS, 950 F. Supp. 2d 108, 2013 BL 27364 (D.D.C. 2013), affirmed 742 F.3d 1013, 2014 BL 36052 (D.C. Cir. 2014). Boulware didn't cite Loving but said Sexton and Esquire pleaded sufficient facts to raise the question whether Sexton remained subject to the IRS's jurisdiction since he was merely a tax preparer and not acting in a representative capacity.
