Loving is Affirmed: IRS Lacked Authority to Regulate Tax Preparers

Abstract

This article examines the factual background of Loving v. IRS, the invalidated return preparer regulations, and the statute that the IRS relied on as authority. It reviews the district and circuit court opinions and discusses the options available to the IRS to regulate the tax return preparation industry in the wake of those decisions.

The article concludes that both the district court and court of appeals correctly interpreted the statute and held that the IRS did not have authority to regulate the tax preparation industry. While regulation of unlicensed tax preparers may be worthwhile, the oversight of such a significant industry should be premised on a specific grant of Congressional authority.

Keywords: Tax, IRS, Circular 230