Daily Tax Report ®

IRS Can Still Punish Preparer Misconduct Despite ‘Loving’ Case

July 30, 2018, 8:21 PM

The IRS technically doesn’t have the authority to regulate tax return preparers, but it does have enforcement tools to crack down on rampant misconduct and should use them, a Treasury Department watchdog said.

“Notwithstanding the decision in Loving v. IRS, the IRS has tools to hold incompetent and unscrupulous preparers accountable,” the report said, citing a federal appeals court case that found the Internal Revenue Service doesn’t have the statutory authority to regulate tax return preparers.

“Collection of tax preparer penalties is not effectively prioritized or worked given that only about 15 percent of assessed penalties are being...

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