The Senate Finance Committee is expected to hear testimony related to the regulation of paid tax return preparers on April 8. IRS Commissioner John Koskinen, National Taxpayer Advocate Nina Olson and James McTigue of the Government Accountability Office are expected to testify, along with several private practitioners and advocates.

In February, the Court of Appeals for the D.C. Circuit in Loving v. IRS, No. 13-5061 (D.C. Cir. 2014) affirmed a district court decision invalidating regulations establishing standards for paid tax return preparers, holding that the IRS acted outside its statutory authority. The final regulations at the heart of the controversy (T.D. 9527), were issued in May 2011 and established minimum competency standards for individuals who prepare tax returns, refund claims and other documents submitted to the IRS.

Advocates against the preparer registration regulations argue that the regulations overburden and impose unfair requirements on return preparers who are not CPAs, lawyers or enrolled agents. Advocates of the regulations argue that the rules are intended to protect taxpayers from unethical or incompetent return preparers.

Former Senate Finance Committee Chair Max Baucus, D-Mont., introduced a measure as part of a tax administration discussion draft on tax reform that would give the IRS the statutory authority to specifically regulate nonlegacy Circular 230 tax return preparers, but that legislation has not progressed.

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