Scarinci Hollenbeck, LLC
The Firm
201-896-4100 info@sh-law.comFirm Insights
IRS Relies on Rule from 1800s to Justify Tax Preparer Regulations
Author: Scarinci Hollenbeck, LLC
Date: October 9, 2013
Key Contacts
Back
The Internal Revenue Service is pulling out all the stops to support a set of proposed rules that would allow it to better regulate tax preparers, as evidenced by its use of a long-forgotten law from the 1800s to justify its argument.
At an appellate court hearing challenging the IRS tax law, Justice Department representative Gilbert Rothenberg cited the “Horse Act of 1884” as a governing piece of legislation that authorizes the IRS to regulate thousands of independent tax preparers, according to Reuters. Rothenberg explained that in the years following the Civil War, many Americans submitted war loss claims to the government for lost or missing horses. This led to the emergence of unregulated agents who would represent and lobby for these individuals for a fee. Over time, many agents began inflating both claim values and fees, which led to the government passing legislation to regulate intermediaries, Rothenberg concluded.
He explained that this scenario largely mirrors what could occur in present time if tax preparers are permitted to work without government oversight or be required to to pass a competency test and take annual continuing education classes. However, the Institute for Justice, which opposes the IRS law, argued that “representatives” and “service providers” do not fall under the same classification, and that tax preparers merely provide a paid service to clients.
“Preparing a tax return is not a representative act,” said Dan Alban, a representative for the institute, according to Reuters. “It is performing a service, certainly, but there’s no representation.”
The three appellate judges hearing the case seemed to agree, and peppered Rothenberg with questions about the scope and history of this law, according to Politico. However, the court is not expected to reach a ruling for some time, as arguments over whether independent tax preparers should face stricter regulations will continue for the next several months.
- Practices: Tax and Trusts & Estates
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Failing to Comply With NJ Rent Control Exemption May Prove Costly
What Developers Need to Know About New Jersey’s Rent Control Exemption Law to Ensure Entitlement to Exemption for Newly Constructed Multi-family Housing. A property owner in Jersey City is facing a $400 million federal class action lawsuit alleging that the landlord did not follow the procedural steps required to be eligible for exemption from local […]
Author: Patrick T. Conlon
Crypto Securities Law: When Tokens Become Investment Contracts
The application of traditional federal securities laws to crypto assets continues to evolve. In some cases, the Securities and Exchange Commission (SEC) considers tokens and other digital assets to be securities. This makes them subject to federal securities law, including the Securities Act of 1933 and the Securities Exchange Act of 1934. This classification has […]
Author: Bryce S. Robins
The Due Diligence Process for NY Condominiums and Cooperatives
While the New York City real estate market can be extremely competitive, moving too quickly often backfires. Before purchasing a condominium or cooperative in New York City, it is important to do you homework. Purchasing property in NYC can involve a dizzying number of legal issues. These include condo and co-op rules, rent restrictions, and […]
Author: Jesse M. Dimitro
Smart Contract Legal Issues: Drafting Agreements for Blockchain
Smart contracts feature a unique blend of legal agreement and technical code. This innovation has the potential to reshape how business is conducted. At the same time, smart contract legal issues around enforceability, jurisdiction, identity, and compliance are common. The legal framework for these self-executing agreements is still evolving. What Are Smart Contracts? Smart contracts, […]
Author: Bryce S. Robins
Are Stay Interviews the Key to Retaining Top Talent?
Retaining top talent continues to be one of the greatest challenges facing employers today. Even in an employer’s market, the loss of a key employee can disrupt operations and result in significant costs. While compensation plays a role, long-term retention often depends on workplace culture, communication, and employee engagement. One increasingly popular strategy for improving […]
Author: Angela A. Turiano
Why Secured Transactions Are Important
Secured transactions form the backbone of a wide range of business dealings, including business loans, mortgages, and inventory financing. Because the stakes are often high and relatively minor oversights can have drastic consequences, lenders and borrowers should thoroughly understand how to form an enforceable security agreement that protects their legal rights. What Is a Secured […]
Author: Dan Brecher
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.