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State Board Report

December 2015

The IRS voluntary tax preparer Record of Completion program was pushed back by an October 30 decision of an appeals court in the case of American Institute of CPAs v. Internal Revenue Service and John Koskinen. Tax preparers who took the IRS required prerequisites to obtain a Record of Completion would not be able to use the terms "certified," "enrolled" or "licensed"; however, the U.S. District Court for the District of Columbia concluded competition with CPAs could occur as "participating preparers remain free to tell potential clients that they have a Record of Completion demonstrating that they satisfied the Program’s educational requirements and passed the test. Indeed, that is the very purpose of the Program. Moreover, participating preparers’ names will appear in the Directory of Federal Tax Return Preparers alongside the names of CPAs and other credentialed preparers."

The District Court decided not to voice an opinion on whether or not the Record of Completion would confuse the public, but the Court did agree with "the allegation that CPAs and their firms are more likely to lose business to an unenrolled preparer with a Record of Completion and a listing in the government directory than to an unenrolled preparer with no credentials at all."

NASBA Outside Legal Counsel Noel L. Allen, whose firm had filed an amicus curiae brief on NASBA’s behalf in the AICPA v. IRS case, had addressed the NASBA Annual Meeting on October 27 and, at that time, identified three current major legal topics that Accountancy Board members should be following: marijuana legalization; use of title and deceptive credentials; and the impact of the North Carolina State Board of Dental Examiners v. FTC Supreme Court decision. In addition, State Boards are being sent information on the implications of the North Carolina Dental Board case decision to be reviewed with their own legal counsel.

The NASBA amicus brief had stated that the lower court erred because it "held as a matter of law that consumer confusion is unlikely to result from a tax return preparer’s use of an Annual Filing Season Program Record of Completion credential." The Court of Appeals did not sustain the lower court’s finding about public confusion. "Unless the IRS seeks Supreme Court review, the case will go back to the District Court for further proceedings," Mr. Allen explained.

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