Federal Court Issues Ruling Against IRS in Class Action Lawsuit Challenging PTINs

Every year, thousands of taxpayers in the United States, both individuals and businesses, experience disputes with the Internal Revenue Service (IRS) related to matters such as:

  • Tax penalties
  • Back taxes
  • Employment taxes
  • Unfiled tax returns

Occasionally, these types of matters can grow increasingly complex, requiring careful litigation by a qualified tax attorney. This is especially true in situations where a taxpayer is forced to take legal action against the IRS, like contesting fees or other penalties associated with the filing of tax documents.

Federal Court Ruling Against IRS

A federal judge recently ruled against the IRS in a class-action lawsuit brought by tax preparers that challenged the IRS’ right to charge Preparer Tax Identification Numbers (PTIN). As a result, the IRS may be required to refund the hundreds of millions of dollars in fees that it collected each year the system was utilized.

The decision, which was handed down by the U.S. District Court for the District of Columbia, determined that, while the IRS possesses the authority to utilize PTINs, it lacks the authority to charge individual user fees. The lawsuit had revolved around select regulations that both the IRS and the Treasury Department had issued in 2010 for registering preparers with PTINs.

Four years ago, the same court ruled that IRS regulations that required testing and continuous education of tax preparers had overstepped the organization’s statutory authority. However, it left PTIN requirements for tax preparers in place – a decision that was upheld a year later when appealed.

In response to the recent federal ruling, the IRS has suspended use of the PTIN system, pending further litigation.

Addressing Tax Litigation Issues in Texas

From unpaid taxes to disputing tax-related fees or penalties – as was the case in the aforementioned case – it is important to find an attorney who can work closely with you to solve your tax litigation issues.

Depending on the circumstances surrounding your tax matters, an attorney may recommend several potential courses of action, such as:

  • Filing suit in U.S. Federal Court
  • Installment Agreement
  • Filing suit in U.S. Tax Court
  • Offer in Compromise
  • Penalty Abatement

Finding a Qualified Tax Attorney

If you or someone you know is experiencing a tax issue that requires litigation, the attorneys at the Scammahorn Law Firm, P.C. are prepared to help. Our firm is comprised of only the finest tax attorneys who have the legal acumen and experience necessary when dealing with tax litigation matters. No matter the situation, our firm is committed to working closely with you to achieve a favorable resolution for your case.

To schedule an initial consultation with a member of our legal team to discuss your tax or IRS issue, we invite you to contact the attorneys at the Scammahorn Law Firm P.C. at (903) 595-1000.