Daily Tax Update - May 21, 2015: IRS Will Refund Tax Return Preparer Test Fees

IRS Will Refund Tax Return Preparer Test Fees:  The IRS announced that it will refund fees paid by tax return preparers from November 2011 to January 2013 to take the Registered Tax Return Preparer test.  In Loving v. IRS, 742 F.3d 1013 (D.C. Cir. 2014), the court determined that the IRS did not have the authority to regulate or require testing for paid tax return preparers under Circular 230.  Therefore, the IRS will refund the fees for the testing that occurred prior to the court’s decision.  In light of the Loving ruling, which ended the regulation of paid tax return preparers, the IRS has developed a voluntary program for return preparers.

Court Denies Enforcement of IRS Summons:  In United States v. Sanmina Corp., 5:15-cv-00092, the Northern District of California denied the enforcement of an IRS summons because the memoranda sought are protected by the attorney client privilege and attorney work product doctrine.  The documents were prepared by in-house counsel and given to accountants providing tax advice.  The court also determined that Sanmina did not waive the privilege by producing a report that references the memoranda, or by providing the memoranda to a law firm that provided both legal and non-legal services.