Loving Plaintiffs File Motion Opposing IRS Request for Stay of Injunction

The IRS's arguments for a stay of the injunction should not be taken at face value. The IRS has neglected to inform this Court of critical information with direct bearing on its claim of irreparable harm, and has repeatedly and materially misrepresented its quantification of alleged harms.

First, the IRS has failed to inform this Court in either its brief or the accompanying declaration that on January 3, 2013, fifteen days prior to this Court's ruling, the IRS announced it would delay enforcement of the RTRP continuing education ("CE") requirement for an additional year.¹ Thus, the IRS's argument of irreparable harm is completely undercut by its own actions; the only RTRP requirement that would currently be binding on tax preparers (in the absence of the injunction) has already been delayed for one year by the IRS itself. This alone warrants denial of the IRS's motion. On top of that, acting entirely of its own accord, the IRS has taken down its personal tax identification number ("PTIN") registration system and states on its website that "tax return preparers covered by this [RTRP] program are not currently required to register with the IRS," apparently suspending the PTIN requirement for RTRPs, even though the PTIN requirement was never challenged by Plaintiffs nor enjoined by the Court.² Bizarrely, the IRS now apparently blames Plaintiffs for this spontaneous, self-inflicted harm.

Second, the IRS has greatly inflated the harms it claims to quantify by repeatedly conflating persons and regulations unaffected by this Court's ruling with those that are. First, the IRS completely fails to distinguish between the RTRP regulations which were struck down, and the separate PTIN regulations, which were not. For example, looking only to the IRS's monthly revenue derived from the RTRP regulations enjoined by this Court (and not the PTIN regulations, which were not enjoined), the claimed figure of $4 million per month suddenly shrinks to $192,697 per month, about 5% of the amount claimed by the IRS. Compare Defs.' Mem. 7, ECF No. 23-1 with Campbell Dec. ¶ 10, ECF No. 23-2. Second, the IRS frequently fails to distinguish between all PTIN holders and the subset of PTIN holders (actual or prospective RTRPs) directly affected by this Court's decision. For example, while the IRS claims that "[o]ver 700,000 preparers have registered with the Service," Defs.' Mem. 7, it neglects to inform the Court that only about half that number are actually subject to the RTRP regulations -- the remainder are attorneys, CPAs, and enrolled agents.³ This misleading use of inflated figures occurs throughout the IRS's brief and accompanying declaration. In short, the IRS is trying to pull a fast one. Its motion should therefore be denied.

But even taken at face value, the IRS's arguments for a stay are truly appalling. The IRS argues that tax preparer regulation is a cash cow that has already generated over $100 million in fees at a cost of only about $50 million, and thus it must be permitted to continue milking $4 million per month in fees (about 95% of which are really PTIN fees unaffected by this Court's injunction) from hapless tax preparers despite this Court's ruling that its regulatory scheme is unlawful. Defs.' Mem. 7. It is difficult to imagine a private party arguing with a straight face that, having just had its profit-making scheme declared legally void, it will suffer "irreparable harm" if it is not permitted to continue unlawfully exploiting consumers. But the IRS doesn't stop there -- it also claims the injunction should be suspended because preparers who paid these unlawful fees are likely to sue for refunds, possibly in class actions. The IRS then shamelessly asks this Court to suspend the one protection that stands between preparers and these unlawful fees so that it can continue extracting additional fees (and creating even greater potential liability for the government if it loses on appeal). Subjecting tax preparers to millions of dollars in fees each month the stay remains in place is hardly "preventative or protective" and is certainly not merely "maintain[ing] the status quo," as the IRS claims. Defs.' Mem. 2. Moreover, this is completely zero-sum: any gains for the IRS are offset by an equal amount of harm to tax preparers. Enabling this sort of exploitative behavior cannot be in the public interest.

Courts in this jurisdiction consider four factors in reviewing a motion for a stay: "(1) whether the stay applicant has made a strong showing that it is likely to succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure the other parties interested in the proceeding; and (4) where the public interest lies." Nat'l Ass'n of Mfrs. v. NLRB, 2012 U.S. Dist. LEXIS 73506, *4-6 (D.D.C. Mar. 7, 2012). The first two factors are the most critical. Nken, 556 U.S. at 434. "It is not enough that the chance of success on the merits be 'better than negligible.' . . . '[m]ore than a mere 'possibility' of relief is required.'" Id. (internal citations omitted.) Similarly, "simply showing some 'possibility of irreparable injury,' fails to satisfy the second factor." Id. at 434-35 (internal citations omitted).

Contrary to the IRS's contention, Defs.' Mem. 3, following the Supreme Court decision in Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7, 22 (2008), the D.C. Circuit has indicated, without deciding the matter, that the "sliding scale approach" (which allows a strong showing in one factor to compensate for other) to evaluating these four factors is likely disfavored, and has suggested that motions for extraordinary relief such a stay should face "a more demanding burden" in which each of the four factors is an independent requirement that must be satisfied. Sherley v. Sebelius, 644 F.3d 388, 392 (D.C. Cir. 2011); see also Davis v. Pension Benefit Guar. Corp., 571 F.3d 1288, 1292 (D.C. Cir. 2009).⁴ The cases cited by the IRS in support of the "sliding scale" approach predate this shift. Defs.' Mem. 3.

This Court issued a clear and unequivocal opinion for Plaintiffs. The Court found that this case "boils down to one question: Is [31 U.S.C.] § 330 ambiguous as to whether tax-return preparers are "representatives" who "practice" before the IRS?" Slip Op. 9, ECF No. 22. The Court's answer was a definitive no, and it "conclude[d] that § 330 unambiguously forecloses the IRS's interpretation for three reasons." Slip Op. 10. On the key issue of interpreting the statutory text, the Court found that "'practice' is . . . [when] representatives 'advise and assist persons in presenting their cases.'" Slip Op. 11. Having made this finding, the Court found that the IRS's interpretation of the statutory text completely unraveled:

Having identified three separate major reasons for rejecting the IRS's interpretation of Section 330, and finding that the IRS offered no persuasive countervailing reasons for accepting the IRS's interpretation, the Court concluded "that together the statutory text and context unambiguously foreclose the IRS's interpretation of 31 U.S.C. § 330." Slip Op. 19. This was an unwavering opinion that found no merit in any of the IRS's arguments. Even when the Court identified a potential statutory argument that the IRS had failed to make in support of its position, it poked several holes in the argument before setting it aside. Slip Op. 18. The IRS has not identified any clear error or obvious mistake of the sort that might raise questions about the ability of the opinion to withstand appellate review, notwithstanding the assortment of new potential arguments the IRS has managed to brainstorm. Defs.' Mot. 5-6. Given the conclusive nature of the Court's opinion, there is no basis to support the IRS's claim that it is likely to prevail on appeal and the IRS fails to meet its burden of showing that a grant of extraordinary relief is justified.

A. The IRS has undermined its own claim of harm by suspending the only RTRP requirement that would currently be binding on tax preparers in the absence of an injunction.

Although the IRS claims that it will suffer irreparable injury if a stay is not issued, it has already scuttled its own arguments by postponing the deadline on which its regulations will actually be enforced for an entire year. While the deadline to complete the RTRP exam is not until December 31, 2013, the IRS had warned preparers for nearly a year that there was a firm December 31, 2012 deadline for completing RTRP continuing education (CE) requirements for 2013.⁶ But in early January, before this Court's decision, the IRS Return Preparer Office announced on its Facebook page that preparers would be able to "make up" CE hours in 2013 that they did not complete in 2012.⁷ This means that preparers can apply for and obtain the PTINs required for paid tax return preparation in 2013 without showing they have completed their 2012 CE requirements, and they will not have to satisfy those requirements until December 31, 2013, well after the 2013 tax season has ended. Therefore, the IRS's claim of irreparable harm from an injunction against the RTRP regulations rings hollow given that it has already done this supposed "irreparable harm" to itself by suspending the only RTRP requirement that would have been applicable during the 2013 tax season.

This self-imposed delay in enforcement of the RTRP regulations also highlights the lack of urgency in implementing these licensing regulations. For 100 years, there has been no federal government licensure for tax return preparers. Originally announced in June 2009, it took the IRS two years to develop and promulgate the regulations, and even longer to make the required RTRP exam and CE classes a practical reality.⁸ The RTRP exam was not made available until late November 2011.⁹ Although classes for satisfying the 2012 CE requirement were supposed to be available in January 2012 under IRS Notice 2011-80, the rollout was delayed until the second week of February 2012 because the IRS had not arranged for enough CE providers or classes to fill the anticipated demand.¹⁰ The RTRP requirements have also been rolled into effect gradually, with the deadline for CE requirements originally given as December 31, 2012 (but subsequently postponed until Dec. 31, 2013) and the deadline to pass the RTRP exam claimed to be December 31, 2013, over four and a half years from when the program was announced. Since there has been no urgency in implementing these (unlawful ) regulations, the IRS's claims of "irreparable harm" from a delay of implementing the RTRP regulations by another year or so while the case is on appeal are specious and unavailing.

Although the IRS had not yet suspended the December 31, 2013 exam requirement when this Court issued its opinion, there had already been serious doubts in the tax preparer community about whether the IRS would really enforce this deadline.¹¹ The IRS's latest decision to delay the 2012 CE requirement for an entire year based on purported failures of the IRS Return Preparer Office to communicate the CE requirement casts further doubt on whether the IRS regards any of the RTRP deadlines as firm.¹² Coupled with the IRS's history of delays and deadline extensions in implementing the Return Preparer Initiative, see infra Part II(D)(1), it stretches the limits of credibility to believe that the IRS will strictly enforce the December 31, 2013 RTRP exam deadline if the injunction is lifted.

B. The IRS has exaggerated its claims of harm by inflating its figures to include people and regulations that are unaffected by this Court's ruling.

The IRS seems to think that throwing around a lot of large numbers will impress this Court of the harm it claims to suffer. But most of the key figures it cites are inflated by conflating the separate PTIN regulations with the RTRP regulations, such as including PTIN holders not directly affected by this case (attorneys, CPAs, and enrolled agents) or by including revenue derived from PTIN fees, which were not challenged in this lawsuit.¹³ As noted in the introduction, the number of preparers affected by the RTRP regulations is half the number the IRS claims.¹⁴ The IRS's claim of $4 million in monthly income from fees is about twenty times the actual number, since only $192,697 of the monthly fees are derived from RTRP testing. Campbell Decl. ¶ 10. The IRS's total figure of over $105 million in fees also inappropriately includes PTIN fees.¹⁵ Assuming that the $192, 697 monthly figure for RTRP exam fees is an average since the exam was first offered in late November 2011, the total amount of RTRP exam fees collected can only be roughly $2.5 million. In addition, the purported $238,000 cost of notifying tax preparers affected by the injunction of the RTRP regulations is improperly calculated using all PTIN holders. Compare Defs.' Mem. 7 with Campbell Decl. ¶ 13.

Several unquantified alleged costs included in the IRS's brief and declaration are inappropriate because they are either irrelevant to this case or they fail to distinguish between alleged costs relating to PTINs and alleged costs relating to the RTRP regulations. The unquantified alleged costs from shutting down computer systems for PTIN application & renewal, compare Defs.' Mem. 7 with Campbell Decl. ¶ 12, are completely irrelevant to the injunction issued in this case, which did not require the IRS to shut down its PTIN computer system. The IRS does not specify what percentage of the work done by the 167 employees in the Return Preparer Office relates to administering PTINs versus administering RTRP requirements, compare Defs.' Mem. 7 with Campbell Decl. ¶ 10; but the fact that there are 119 user-fee-supported positions, coupled with the fact that the RTRP exam fees make up only about 5% of the total revenue from user fees, indicates that the IRS is again inappropriately conflating PTIN administration with RTRP administration. The IRS never specifies to what extent the alleged costs associated with "modifying or breaching vendor contracts" or "enter[ing] into new contracts" relate to PTIN fees, Defs.' Mem. 7, but the Declaration of Carol A. Campbell seems to indicate that these alleged costs are "[a]s a result" of both closing the RTRP testing centers and shutting down the IT systems associated with the PTIN. Campbell Decl. ¶ 12. Given all of the examples above, it seems a pretty safe bet that the IRS didn't suddenly decide to distinguish between PTIN vendors and RTRP vendors on this one issue.

Whatever actual revenue the IRS might collect from the RTRP scheme, it is much lower than any of the figures cited in the IRS motion, and the IRS will suffer little or no harm from having to forego that revenue while the appeal is pending. The same is true of the dramatically inflated costs. Having provided inflated and misleading figures for these alleged harms, the IRS has failed to meet its burden of justifying the use of the extraordinary remedy of a stay.

C. The IRS should not be able to rely on self-inflicted harms and its failure to mitigate foreseeable harms in support of its request for a stay.

Many of the alleged harms the IRS invokes were completely foreseeable and self-inflicted. It is "well-settled that a preliminary injunction movant does not satisfy the irreparable harm criterion when the alleged harm is self-inflicted." Safari Club Int'l v. Salazar, 852 F. Supp. 2d 102, 123 (D.D.C. 2012) (quoting Lee v. Christian Coal. of America, Inc., 160 F. Supp. 2d 14, 33 (D.D.C. 2001)). The IRS built its RTRP house of cards on the shifting sands of Circular 230 regulations rather than a firm statutory foundation. Given that federal agencies are presumed to have expertise about their own statutes and regulations, the IRS should have been well aware of the precarious position of its new RTRP regulations when it drafted them. Even if not, the IRS was certainly made aware of the ultra vires flaw in the regulations nearly a year before they took effect, when counsel for Plaintiffs offered written and spoken comments explaining why the proposed regulations lacked statutory authority under 31 U.S.C. § 330 at an IRS hearing on the matter on October 8, 2010. See Alban Decl., Exs. 1, 2. The IRS ignored this clear warning sign that statutory authorization for its proposed RTRP scheme was in question and might very well be challenged as ultra vires. Then, on March 13, 2012, the IRS put on notice that it had been sued over the validity of the regulations, and had to have then been aware that the regulations could be struck down, even if it believed such an outcome unlikely. Although it could have taken action to mitigate risks, such as by delaying implementation until the lawsuit was resolved, or making participation voluntary during the pendency of the lawsuit, the IRS nonetheless continued to take actions that exposed it to further costs and liabilities. Plaintiffs, other tax preparers, and the public should not bear the cost of these self-inflicted harms by having them weighed against their interests in prompt and continued enforcement of this Court's injunction. There are consequences to imposing an unlawful licensing scheme on hundreds of thousands of people, and bearing the cost of one's own self-inflicted harms is certainly one of them.

D. Leaving the injunction in place will not result in substantial disruption to tax administration, but staying the injunction could cause substantial disruption.

The IRS claims that "immediately discontinuing the [RTRP] program would result in a substantial disruption to tax administration." Defs.' Mem. 7. Like many of the IRS's arguments, this is really a belated argument for why it believes the injunction should not have issued on January 18 rather than an argument for why the injunction should be suspended now, particularly given that the RTRP program has already been suspended by the IRS.¹⁶ At this point, leaving the injunction in place would preserve the status quo, while suspending the injunction would cause only further disruption if the IRS re-imposes the RTRP licensing scheme on tax preparers that it has just informed are not required to comply with the RTRP regulations. In addition, the reasons offered by the IRS for this purported "disruption" are uncompelling and in fact weigh heavily against issuing a stay. The IRS fails to meet its burden on these issues.

Even if the IRS's cost figure was accurate (which it is not), $238,000 is only about .001983 percent of the IRS's roughly $12,000,000,000 budget.²⁶ Having unlawfully imposed this burdensome licensing scheme on hundreds of thousands of preparers, simply notifying them that enforcement of the regulations has been suspended at the cost of what amounts to a rounding error from its budget is the least the IRS could do to prevent these preparers from wasting further time, money, and effort to comply. That the IRS objects to taking even this minimal level of responsibility to limit the further harm it inflicts on tax preparers is mind-boggling.

E. Most of the harms alleged by the IRS are minor economic harms that will have little effect on the agency, and are not irreparable harms.

Much of the alleged harm the IRS claims it will suffer is in the nature of minor lost revenue (as compared to the agency's budget) or unspecified (but presumably minor) costs incurred, which is known as "economic harm." Although economic harms may be sometimes serious enough to create other harms, particularly for individuals or small businesses, the D.C. Circuit has held that "economic loss does not, in and of itself, constitute irreparable harm." Wisconsin Gas Co., 758 F.2d at 674. Generally, in order to constitute irreparable harm, economic harm must be truly substantial, such as by threatening a person's livelihood or threatening to force a company out of business. See id. But whatever financial losses or other misfortunes may befall the IRS, there is no doubt that the IRS is not going to be put "out of business," nor is its existence the least bit threatened. Thus, the IRS fails to meet its burden of showing irreparable harm with respect to its claims of lost revenue or costs.

If the RTRP regulations were re-imposed, preparers would have to complete 15 hours of CE credits in 2013 (as well as "make up" any credits from 2012) and pass the RTRP exam in 2013; this will impose the same harms on Plaintiffs (and other similarly situated tax preparers) as were alleged in Plaintiffs' Complaint and in the declarations accompanying Plaintiffs' Motion for Summary Judgment. Sabina Loving would incur compliance costs for herself and the other preparers she employs, which would force her to raise her prices, making her less competitive. Loving Decl. ¶¶ 8-17, ECF No. 12-2. The cost and opportunity cost of compliance with these regulations would force Elmer Kilian and John Gambino to close their tax preparation businesses. See Kilian Decl. ¶¶ 10-16, ECF No. 12-3; Gambino Decl. ¶¶ 11-17, ECF No. 12-4. This meets the standard for "irreparable harm" in the D.C. Circuit, see Wisconsin Gas Co., 758 F.2d at 674, and the Court has already found that this would constitute an irreparable injury. Slip Op. 22. The Court has also already weighed the interests of the IRS and Plaintiffs: "With an invalid regulatory regime on the IRS's side of the scale and a threat to Plaintiffs' livelihood on the other, the balance of hardships tips strongly in favor of Plaintiffs." Slip Op. 22.

Moreover, even if Plaintiffs ultimately prevail on appeal, the threat of the regulations being even temporarily re-imposed on Plaintiffs (and other similarly situated tax preparers) if the injunction is lifted during the pendency of the appeal presents a serious risk of irreparable harm. If Mr. Kilian and Mr. Gambino (and other similarly situated tax preparers) are forced to close their tax preparation businesses for even one tax season, they will likely lose a substantial number of their customers in future tax seasons, as their customers will have to seek out new tax preparers in the interim, and may not return. Even if the regulations were ultimately struck down on appeal, and their businesses allowed to reopen, Mr. Kilian and Mr. Gambino (and other similarly situated tax preparers) would find themselves opening a business with no carryover customers from the year before, and would be starting from scratch to build a new customer base. Such an outcome would be devastating, particularly for veteran preparers like 80-year-old Elmer Kilian, who are unlikely to build a new book of clients in their twilight years. Forcing a business such as tax preparation to close for an entire tax season and send all of its business to competitors is thus an "irreparable harm."

A. Plaintiffs Will Be Substantially Harmed If the Injunction Is Lifted.

Sabina Loving will be harmed if the RTRP regulations are no longer enjoined. She has already diligently complied with the 2012 CE requirement for herself, and thus has already suffered harm from the cost of complying with the regulations. Ms. Loving will suffer further harm if the injunction is lifted, because she will be required to pay wages and CE course fees for the seasonal employees who assist her so that they comply with the CE requirements, or she will have to restrict them to purely administrative tasks. See Loving Decl. ¶¶ 8, 9, 16. She will also have to continue complying with the 2013 CE requirements, as well as take and pass the RTRP exam before the end of 2013 (assuming the IRS doesn't further extend the deadlines, as it has extended past deadlines). All of these requirements impose costs on her business that will force her to raise her prices, making her less competitive. See Loving Decl. ¶¶ 10-14, 17

Plaintiffs Elmer Kilian and John Gambino have not completed any RTRP CE credits, nor satisfied the 2012 CE requirement, and thus are not in compliance with the RTRP regulations.³⁰ Alban Decl. ¶ 10. If the injunction is lifted, Mr. Kilian and Mr. Gambino are very likely to be harmed, as they will be forced out of business whenever the IRS decides to enforce the regulations against them.³¹See Kilian Decl. ¶¶ 10-16; Gambino Decl. ¶¶ 11-17. Even if they are permitted to operate this tax season, their businesses would be forced to close before next tax season under the December 31, 2013 deadlines for RTRP exam and CE compliance that existed at the time the injunction was issued. Due to the unpredictable nature of the IRS Return Preparer Office, Mr. Kilian and Mr. Gambino simply have no way of knowing when or if the IRS will demand that they satisfy the RTRP requirements in order to continue preparing tax returns for compensation. This creates great uncertainty for them and for their customers, both of whom need to know if they will be able to continue preparing returns this season and while the IRS's appeal is pending. Removing the injunction would remove the one assurance they have that they will be able to continue to operate their tax return preparation businesses.

B. Other Tax Preparers Will Be Substantially Harmed if the Injunction is Lifted.

For the same reason that Plaintiffs will be harmed by lifting the stay, all similarly situated preparers will be harmed by lifting the stay. Estimates put the number of tax preparers who will be force out of the tax preparation business by the RTRP regulations in the tens of thousands, or as many as 10 to 20 percent of return preparers.³² The National Association of Tax Professionals says that some of its members will retire rather than seek the RTRP designation.³³The Economist has also noted that the RTRP regulations "threaten to crush . . . small, local" tax preparers and are "likely to push mom and pop into another line of work."³⁴ The comments sections of articles about the RTRP regulations in industry publications such as Accounting Today are littered with preparers stating that they personally, or preparers they personally know, will be or have been put out of business or otherwise harmed by the time, costs, and administrative burden of compliance with these regulations.³⁵

Contrary to the IRS's claims, there is nothing approaching "overwhelming public support" for these regulations and most consumers are largely unaware of them. Defs.' Mem. 9 In fact, consumers will actually be harmed more than helped by these regulations due to reduced choice and autonomy over their personal finances, less competition in the tax preparation market, increased costs of tax preparation, and the negative unintended consequences flowing from increased costs: consumers will have a greater incentive to attempt to prepare their own returns (and most are less qualified to do so than tax preparers, resulting in more tax errors), and a black market in unsigned tax returns. The ugly truth is that these regulations are largely backed by industry insiders who stand to profit from pushing out their mom-and-pop competitors, as the IRS tacitly concedes by citing a press release from Intuit (makers of TurboTax,) stating it is "disappointed" in this Court's ruling. Defs.' Mem. 9 n.5. Notably, the RTRP regulations do not apply to TurboTax, but do impose substantial costs on most of its competitors.³⁶

A. The sky is not falling -- tax season has always proceeded without federally licensed preparers.

As noted in the introduction, there has never been a federal government license for tax preparers in the 100-year history of the modern income tax.³⁷ Taxpayers, the tax industry, and the IRS have all functioned in this environment for decades. This is the true status quo that consumers and the tax industry are accustomed to dealing with, and there should be no significant disruptions arising from the fact that the IRS is unable to change the historical status quo by imposing the RTRP licensing scheme. As noted supra, if the RTRP regulations are enforced, as many as 10 to 20 percent of tax preparers may go out of business, which would greatly disrupt tax administration and force tens of millions of consumers to find a new tax preparer, or go without one altogether. There will be far less disruption this tax season if the Court's injunction is allowed to remain in place and thus preserve the historical status quo while this case is on appeal.

B. It is not in the public interest to allow the IRS to use unlawful regulations to extract millions of dollars from tax preparers.

Forcing people to pay fees that have already been declared unlawful in order to generate revenue for federal agencies is simply not in the public interest. The IRS's attempt to argue that this Court should confer extraordinary relief so that the IRS will not be deprived of revenue (using inflated, misleading figures) extracted from the nation's tax preparers is offensive to the public interest in promoting equity and justice. Tax preparers are not simply an instrumental revenue stream for the IRS -- they are individual businesspeople and entrepreneurs trying to earn an honest living by providing a valuable service to taxpayers. Their rights not to pay unlawful fees deserve respect, particularly when the only justification offered is filling the IRS's coffers.

C. Consumers would be harmed by the RTRP regulations.

Although frequently labeled a consumer-protection measure, the RTRP regulations would actually harm consumers by limiting consumers' choices and autonomy over their personal finances, reducing competition in the tax industry, raising prices for tax return preparation, and have negative unintended consequences: the RTRP regulations actually encourage unwarranted confidence in the honesty of RTRP designees, they push unqualified taxpayers to attempt to prepare their own returns, and they create a black market for unsigned tax return preparation.

In addition, the RTRP regulations would have negative unintended consequences, such as pushing unqualified taxpayers to attempt to prepare their own returns.⁴³ The RTRP regulations are also likely to create a black market for unsigned tax return preparation, which would undermine enforcement efforts.

D. The RTRP regulations are not in the public interest and do not have public support, but they are supported by powerful industry insiders.

The IRS claims that the RTRP regulations have "overwhelming public support." Defs.' Mem. 9. This would be news to the vast majority of the public, who don't even know about the regulations, much less support them.⁴⁴ The IRS's implicit claim that public support can be evaluated by participation in administrative proceedings dominated by industry insiders who have strong, concentrated financial interests in the outcome (as compared to the dispersed costs on the general public) is unserious. See Defs.' Mem. 9. The nation's many affected consumers cannot be expected to attend every federal agency hearing or submit written comments in response to every proposed agency action that may negatively impact their interests, nor can small businesses and entrepreneurs. But there is no question that the large industry players and trade associations will be overrepresented as they try to influence an agency's actions to benefit themselves or their members, often at the expense of the interest of consumers and small businesses. Moreover, the reliance on the opinions of panels cited in the IRS Return Preparer Review only serves to highlight industry insider dominance of the entire regulatory process. Even the "Independent Tax Return Preparer Panel" was a hand-selected group that included an H&R Block executive, an H&R Block franchisee, and a Jackson-Hewitt franchisee.⁴⁵ Deputy Commissioner Mark Ernst, the former CEO of H&R Block, who oversaw the drafting of the RTRP regulations, served as the moderator of most of these panels, or offered concluding remarks.⁴⁶

Revealingly, the IRS seeks to bring the Court's attention to the fact that "concerns have already been voiced about the impact of the Court's injunction," citing an Intuit press release. Defs.' Mem. 9 n.5. As the maker of TurboTax, a leading tax preparation software program for consumers that is not subject to the RTRP regulations, Intuit certainly has a strong interest in keeping these regulations in place on its competitors, so it is hardly a surprise to learn that the company is "disappointed" by this Court's decision. This only serves to highlight the true beneficiaries of these regulations: large tax preparation firms and professional trade associations.

These large tax preparation firms and the members of these trade associations stand to benefit from the regulations because they create a barrier to market entry and impose costs that force smaller competitors out of the market. As The Economist explained, the RTRP regulations "threaten to crush . . . small, local" tax preparers and are "likely to push mom and pop into another line of work."⁵¹ Swiss investment bank UBS found that the RTRP regulations "would aid H&R Block (and by implication others) by adding 'barriers to entry (or continuation) for small preparers.'"⁵² More recently, a different investment analyst explained that this Court's ruling "could hurt institutional tax-preparation providers such as H&R Block and Jackson Hewitt by reopening the market to small competitors that the IRS program had been expected to squeeze out."⁵³ In other words, industry insiders are "harmed" by having to compete with independent, mom-and-pop preparers like Plaintiffs, and unsuccessfully sought to regulate them out of existence. The Court should not give them a second opportunity to do so by suspending the injunction.

Indeed, public education has not yet begun in earnest and promotional efforts by the IRS seem to have been delayed or cancelled. In July 2012, Accounting Today reported that "[t]he IRS is still educating preparers about [the] need to take the test; public education is yet to come, with the IRS preparing to launch a database soon for consumers to research the qualifications of their tax preparers."⁶⁴ The public database was announced in a Congressional hearing in July 2011, by then-Director of the Return Preparer Office, David Williams, who said it "may be available as soon as 2013."⁶⁵ At that hearing, House Ways and Means Committee's oversight subcommittee chairman Rep. Charles Boustany expressed concern that the IRS was not doing enough to publicize its efforts.⁶⁶ His concerns seem to have been justified. In June 2012, then-RPO Director Williams renewed his pledge to preparers that the IRS would "launch a searchable database before next filing season so taxpayers can verify your standing and your credentials."⁶⁷ Tax filing season was delayed by one week this year, but the database has still not launched, nor does its launch seem to be imminent. Thus, since the public was never widely aware of the RTRP program in the first place, the public is unlikely to be particularly confused by its absence.

From a practical standpoint, a 14-day stay of the injunction creates risk of substantial turmoil and mass confusion from multiple back-and-forth policy changes with respect to enforcement of the RTRP regulations in a matter of weeks. The IRS suspended enforcement of the regulations on January 22, 2013 as a result of the Court's January 18, 2013 injunction. If the Court declines to stay the injunction during the pendency of the appeal, but grants the alternate requested relief of a 14-day stay of the injunction while the IRS pursues an injunction from the Court of Appeals, the IRS may then reimpose the RTRP regulations during that two-week period -- a second reversal of policy in roughly as many weeks. If the Court of Appeals declines to grant a stay pending appeal or does not decide the stay motion within 14 days, then the IRS would have to once again suspend enforcement of the RTRP regulations -- the third policy reversal in under a month. This would create a high potential for confusion.

Having already suspended its enforcement of the RTRP regulations in compliance with the Court's injunction, the IRS has offered no particular reason why it needs to be able to reimpose the RTRP regulations for a two-week period. The potential downside of multiple policy reversals on enforcement of the RTRP regulations within such a short period of time is far greater than any potential benefit.

RESPECTFULLY SUBMITTED this 29th day of January, 2013.

² Internal Revenue Service, PTIN Requirements for Tax Return Preparers, (last updated January 29, 2013) http://www.irs.gov/Tax-Professionals/PTIN-Requirements-for-Tax-Return-Preparers; accord Internal Revenue Service, IRS Statement on Court Ruling Related to Return Preparers, (last updated January 29, 2013), http://www.irs.gov/uac/IRS-Statement-on-Court-Ruling-Related-to-Return-Preparers (original version posted on January 22, 2013 containing same quoted language).

³See infra Part II(B).

⁴ At the very least, the D.C. Circuit has treated the first factor, likelihood of success, as an independent, free-standing requirement that cannot be overcome by a strong showing on other factors. See Arkansas Dairy Co-op Ass'n, Inc. v. U.S. Dep't. of Agric., 573 F.3d 815 (D.C. Cir. 2009); see also Sherley, 644 F.3d at 393.

⁵ If the IRS fails to meet its burden on any of the four factors, it is not entitled to relief.

⁶See Michael Cohn, IRS Warns Tax Preparers to Get Continuing Education Soon, Posts List of Providers, Accounting Today, Feb. 10, 2012, available at http://www.accountingtoday.com/news/IRS-Warns-Tax-Preparers-Continuing-Education-Providers-61703-1.html.

⁷ The original message was posted on January 3, 2013 at 2:30pm ET but it seems to have been removed from the IRS Return Preparer Office's Facebook page sometime after this Court's ruling, between January 22, 2013, when counsel for Plaintiffs printed a copy of it, and January 26, 2013, when counsel for Plaintiffs attempted to access it again to include the hyperlink in this footnote. See Alban Decl. ¶ 7. For a printed version of this message, see Alban Decl., Ex. 3; see also Joe Kristan, IRS quietly delays CPE requirement under new preparer regulation scheme, Tax Update Blog (January 8, 2013), http://rothcpa.com/2013/01/irs-quietly-delays-cpe-requirement-under-new-preparer-regulation-scheme/ (reprinting initial message and describing it as "a quiet admission of failure"). A lengthy follow-up message from the RPO director was posted on January 10, 2013. See Carol A. Campbell, Message from Carol A. Campbell, RPO Director, IRS Return Preparer Office Facebook Page (January 10, 2013, 8:42 AM), available at https://www.facebook.com/notes/irs-return-preparer-office/message-from-carol-a-campbell-rpo-director/394688837284100.

⁸See News Release, Internal Revenue Service, IRS Marks Third Anniversary of Return Preparer Review; Urges Required Preparers to Take Competency Test as Soon as Possible, June 5, 2012, IR-2012-59, available at http://www.irs.gov/uac/IRS-Marks-Third-Anniversary-of-Return-Preparer-Review;-Urges-Required-Preparers-to-Take-Competency-Test-as-Soon-as-Possible.

⁹ News Release, Internal Revenue Service, IRS Moves to Next Phase of Return Preparer Initiative; New Competency Test to Begin, Nov. 22, 2011, IR-2011-111, available at http://www.irs.gov/uac/IRS-Moves-to-Next-Phase-of-Return-Preparer-Initiative%3B-New-Competency-Test--to-Begin.

¹⁰Id.; Carol A. Campbell, Message from Carol A. Campbell, RPO Director, IRS Return Preparer Office Facebook Page (January 10, 2013, 8:42 AM), available at https://www.facebook.com/notes/irs-return-preparer-office/message-from-carol-a-campbell-rpo-director/394688837284100.

¹¹See, e.g., Robert D. Flach, Return Preparer Office Statistic Update, The Tax Professional, January 8, 2013, http://thetaxprofessional.blogspot.com/2013/01/return-preparer-office-statistic-update.html (noting that most tax preparers will not have time to take RTRP exam until after tax season ends, and asking, "[s]o Prometic will need to provide a testing opportunity for 753 individuals per week in each of the 50 states. Is that physically possible?"); see also Letter from Francis X. Degen, President, National Association of Enrolled Agents, to David Williams, Director, IRS Return Preparer Office (Aug. 15, 2012), available at http://www.naea.org/node/390.

¹² Tellingly, RPO Director Carol Campbell's January 10 Facebook message explicitly left open the possibility that the December 31, 2013 RTRP exam deadline would be postponed, twice referring to it as the "decision[ ]" about "what will happen if the testing deadline is not met" and "any decision with respect to testing." Carol A. Campbell, Message from Carol A. Campbell, RPO Director, IRS Return Preparer Office Facebook Page (January 10, 2013, 8:42 AM), available at https://www.facebook.com/notes/irs-return-preparer-office/message-from-carol-a-campbell-rpo-director/394688837284100. The fact that the head of the Return Preparer Office is already hedging and offering disclaimers nearly a year in advance of the deadline is a strong indicator that the IRS does not genuinely plan to impose a firm deadline.

¹³ This case challenged the RTRP regulations contained in Circular 230, 31 C.F.R. part 10, as published in 76 Fed. Reg. 32,286, which purported to have been passed under authority of 31 U.S.C. § 330. The PTIN requirements are based on an entirely separate statute, 26 U.S.C. § 6109, and are contained in a separate set of regulations, 26 C.F.R. § 1.6109-2. Although the challenged RTRP regulations in the August 2011 revision of Circular 230 do require that an RTRP applicant have a PTIN, 31 C.F.R. § 104(c), the Circular 230 regulations are not the source of regulatory authority mandating use of the PTIN and payment of the PTIN fee by all tax preparers. Those requirements are found in the PTIN regulations, 26 C.F.R. § 1.6109-2.

¹⁴ To be clear, 600-700,000 was the IRS's early estimate of the number of unenrolled preparers who would be subject to the RTRP program. See 76 Fed. Reg. at 32,299. That estimate has since declined to 350,000. See Press Release, Internal Revenue Service, Tax Preparers Must Renew Their PTINs and Those Required to Take the RTRP Test Should Schedule It As Soon As Possible (Dec. 20, 2012), available at http://www.irs.gov/uac/Newsroom/Renew-PTINs-for-2013,-Take-the-RTRP-Test-if-Required ("There are currently 739,000 tax preparers with 2012 PTINs. Approximately 350,000 of them are subject to the new [RTRP] testing and CE requirements."). It is unknown whether the difference between the two figures can be attributed solely to an estimation error or is partly a result of preparers leaving the tax preparation business due to the time, cost and administrative burden of complying with the RTRP regulations.

¹⁵ Oddly, IRS Return Preparer Office Director Carol Campbell states that revenue from these fees "exceeded $105,810,000" but never provides an exact figure. Campbell Decl. ¶ 10 (emphasis added).

¹⁶See Internal Revenue Service, IRS Statement on Court Ruling Related to Return Preparers (last updated Jan. 25, 2013), http://www.irs.gov/uac/IRS-Statement-on-Court-Ruling-Related-to-Return-Preparers.

¹⁷ This has become so common and problematic that at least one professional trade association has written the IRS a letter asking them to not delay an RTRP deadline that is nearly a year and a half away. Letter from Francis X. Degen, President, National Association of Enrolled Agents, to David Williams, Director, IRS Return Preparer Office (Aug. 15, 2012), available at http://www.naea.org/node/390.

¹⁸ For an example of the disruption routinely caused by the IRS's misadministration of the RTRP regulations, see Alban Decl., Ex. 3 (the comments from preparers are illustrative and reference previous examples of similar disruptions); see also Joe Kristan, IRS quietly delays CPE requirement under new preparer regulation scheme, Tax Update Blog (January 8, 2013), http://rothcpa.com/2013/01/irs-quietly-delays-cpe-requirement-under-new-preparer-regulation-scheme/ (describing IRS message as "a quiet admission of failure"). The outrage over the latest deadline extension was so significant that the head of the Return Preparer Office made a follow-up post a week later. See Carol A. Campbell, Message from Carol A. Campbell, RPO Director, IRS Return Preparer Office Facebook Page (January 10, 2013, 8:42 AM), available at https://www.facebook.com/notes/irs-return-preparer-office/message-from-carol-a-campbell-rpo-director/394688837284100.

¹⁹ Michael Cohn, IRS Delays Tax Preparer Fingerprinting Requirement, Accounting Today, Nov. 8, 2011, available at http://www.accountingtoday.com/news/IRS-Delays-Tax-Preparer-Fingerprinting-Requirement-60744-1.html.

²⁰ Jeff Stimpson, Preparers Report Trouble with CE Credit from IRS Forums, Accounting Today, Sept. 10, 2012, available at http://www.accountingtoday.com/taxprotoday/news/Preparers-Report-Trouble-with-CE-Credit-from-IRS-Forums63936-1.html.

²¹See infra Part III(D)(3). In 2012, the IRS was beaten to the punch by online marketers who used FOIA requests to obtain information on some 700,000 PTIN preparers and build online databases for advertising or possibly "phishing" purposes. See Tennessee Society of CPAs, Several PTIN Sites Go Live; Be Wary of Providing Profile Information, TSCPA Hotwire (October 2012), http://www.tscpa.com/Content/Files/Publications/Hotwire/2012/OctHotwire_ptin.asp.

²² Carol A. Campbell, Message from Carol A. Campbell, RPO Director, IRS Return Preparer Office Facebook Page (January 10, 2013, 8:42 AM), available at https://www.facebook.com/notes/irs-return-preparer-office/message-from-carol-a-campbell-rpo-director/394688837284100.

²³ Relatedly, the IRS also claims it will "incur [unspecified] costs associated with modifying and updating numerous websites that provide information regarding the [RTRP] program." Campbell Decl. ¶ 12. Any such costs would be trivial at best, are economic and not irreparable, and may have already been incurred, as the IRS has posted notices on both its main webpage and the webpage for tax preparers. See Internal Revenue Service, IRS Statement on Court Ruling Related to Return Preparers, (last updated January 25, 2013), http://www.irs.gov/uac/IRS-Statement-on-Court-Ruling-Related-to-Return-Preparers; Internal Revenue Service, for Tax Pros, (last updated January 25, 2013), http://www.irs.gov/for-Tax-Pros.

²⁴ In a world where the vast majority of people have an email address and where most tax preparers contact and get news from the IRS via email and the IRS website (including the e-file system), there is no excuse for these sort of costs, particularly when the IRS apparently regards posting notices on its Facebook page as sufficient to notify preparers of a major change to CE requirements, see supra. The entire point of the PTIN system is for the IRS to have a registry of all preparers, including their contact information. In fact, Form W-12, the PTIN application and renewal form, contains a field for preparers to provide their email address. See Internal Revenue Service, Form W-12, Line 4 (Sept. 2012), available at http://www.irs.gov/pub/irs-pdf/fw12.pdf. The email addresses (and other contact information) of some 700,000 PTIN holders were among the items of personal information disclosed to online marketers under a FOIA request in 2012. See Tennessee Society of CPAs, Several PTIN Sites Go Live; Be Wary of Providing Profile Information, TSCPA Hotwire (October 2012), http://www.tscpa.com/Content/Files/Publications/Hotwire/2012/OctHotwire_ptin.asp. It may be true that not all PTIN applicants have an email address or that some have left the field blank, but the IRS could contact the vast majority of tax preparers affected by the injunction electronically while mailing notices to those for whom it has no email address. The IRS also has a number of e-News subscription lists, including several specifically for tax preparers, to which it can freely send notices. See Internal Revenue Service, e-News Subscriptions, http://www.irs.gov/uac/e-News-Subscriptions-2 (last visited January 27, 2013). And, of course, the IRS can also prominently display notices about the ruling on various relevant pages of its website, which it has already done, as noted supra.

²⁵ It speaks volumes that the IRS thinks nothing of imposing substantially greater (sometimes business-closing) costs on tax preparers in the form of the unlawful RTRP requirements and fees when those costs are diffused amongst hundreds of thousands of preparers, but objects when the far more minor cost of merely contacting all of these people is concentrated on the IRS.

²⁶See Internal Revenue Service, IRS FY 2013 Budget Proposal Summary (February 2012), http://www.irs.gov/uac/IRS-FY-2013-Budget-Proposal-Summary (noting a FY2013 budget of "$12.8 billion, a $944.5 million increase . . . over the FY 2012 enacted level").

²⁷ Moreover, this claim is yet another example of the IRS inflating its alleged harms with irrelevant and untrue claims about the impact of the injunction on the PTIN system. The IRS claims that, in order to comply with the injunction, it will be "forced to completely shutdown [sic] the IT systems associated with the PTIN application and renewal program." Campbell Decl. ¶ 12. Again, as explained supra in Part II(B), this lawsuit did not challenge the PTIN requirement, which is authorized by an entirely different statute, and which is governed by two different sets of regulations that are not part of the Circular 230 regulations challenged here.

²⁸ Internal Revenue Service, Statement on IRS FY 2012 Performance Results (last updated January 15, 2013), http://www.irs.gov/uac/Newsroom/Statement-on-IRS-FY-2012-Performance-Results.

²⁹ Among other findings, the GAO report found that average IRS telephone-call response times had risen to a five-year high of 17 minutes, and only 68 percent of callers even got through to an IRS representative. The agency also failed to respond to 40 percent of the correspondence it received within 45 days. Government Accountability Office, IRS Faces Challenges Providing Service to Taxpayers and Could Collect Balances Due More Effectively, GAO-13-156, Dec. 18, 2012, available at http://www.gao.gov/products/GAO-13-156.

³⁰ The IRS leaps to the false conclusion, based on a news article stating that all three plaintiffs had merely applied for PTINs, that Mr. Kilian and Mr. Gambino have completed their CE requirements, which they have not. Defs.' Mem. 8; Alban Decl. ¶ 10. Then, outrageously, it wrongly suggests that Mr. Kilian and Mr. Gambino have perjured themselves in their declarations. Defs.' Mem. 8; Alban Decl. ¶ 10. This confusion could have been avoided if the agency had examined the Form W-12 PTIN applications that Mr. Gambino and Mr. Kilian submitted, which clearly indicate that they have not completed the CE requirement, and explain that they have not done so because they are plaintiffs in this lawsuit, which challenges the validity of the unlawful regulations, including the CE requirement, and ask the IRS to direct any correspondence to counsel. Alban Decl. ¶ 11. Alternatively, the IRS could have checked its own CE records for preparers with registered PTINs to learn that neither Mr. Kilian nor Mr. Gambino has completed any CE credits.

³¹ Optimistic that they would prevail in this case, and not wanting to lose longtime customers, Mr. Kilian and Mr. Gambino wanted to have PTIN applications pending in the event of a favorable ruling. Alban Decl. ¶ 9. Indeed, both have already stated in declarations that they planned to continue operating as tax return preparers if the RTRP regulations were struck down. See Kilian Decl. ¶ 17; Gambino Decl. ¶ 18. They planned to continue preparing returns in 2013 so long as their respective PTIN applications were pending, unless and until notified by the IRS that they were no longer permitted to prepare returns. The IRS has not contacted counsel for plaintiffs about either Mr. Kilian's or Mr. Gambino's PTIN application. Alban Decl. ¶ 12.

³²See Eric Kroh, Shortage of Tax Return Preparers Feared in Face of New Requirements, Tax Analysts, Dec. 2012, (attached as Ex. 4 to Alban Decl.); Roger Russell, Tax Preparer Shortage on the Way, Accounting Today, Sept. 7, 2012, available at http://www.accountingtoday.com/news/tax-preparer-shortage-63903-1.html.

³³ Eric Kroh, Shortage of Tax Return Preparers Feared in Face of New Requirements, Tax Analysts, Dec. 2012, (attached as Ex. 4 to Alban Decl.); see also Roger Russell, Tax Preparer Shortage on the Way,Accounting Today, Sept. 7, 2012, available at http://www.accountingtoday.com/news/tax-preparer-shortage-63903-1.html ("A high percentage of the industry's most experienced tax preparers, are elderly" explained tax industry expert Chuck McCabe, "[r]ather than take the exam, many will retire.").

³⁴Guides Through the Swamp: A Big Shake-up for America's Tax-preparation Industry, The Economist, Mar. 24, 2012, available at http://www.economist.com/node/21551052

³⁵See, e.g., Tax Preparers React to Court Decision, Accounting Today, Jan. 22, 2013, available at http://www.accountingtoday.com/news/Tax-Preparers-React-to-Court-Decision-65412-1.html (comments of rajendra, sfaubert, foxy44, tomm1015 on intrusiveness of, and burden imposed by, the RTRP regulations); Michael Cohn, Court Rules IRS Doesn't Have the Authority to Regulate Tax Preparers, Accounting Today, Jan. 18, 2013, available at http://www.accountingtoday.com/news/IRS-Loses-Lawsuit-Challenging-Authority-Regulate-Tax-Preparers-65408-1.html (comments of taxpro2, kannecat, Nanci T., Mast_48, olivertax discussing threat to their business posed by RTRP regulations); Jeff Stimpson, Tax Pros Speak Out on RTRP Regime, Accounting Today, May 29, 2012, available at http://www.accountingtoday.com/taxprotoday/news/Tax-Preparer-RTRP-requirements-exam-NSA62790-1.html?ET=webcpa:e2551:283576a:&st=email&utm_source=editorial&utm_medium=email&utm_campaign=tpt_052912&taxpro (article mentions a "preparer of long experience [who] is leaving the profession due to an anxiety condition about the test," see also comments of his excellency, catkimball, MDEMCISAK, and jgreenhow discussing threat to their business posed by RTRP regulations); Jeff Stimpson, IRS's Williams: It's Test-Taking Time, Accounting Today, May 14, 2012, available at http://www.accountingtoday.com/taxprotoday/news/IRS-Internal-Revenue-Service-David-Williams-RTRP-Registered-Tax-Return-Exam62643-1.html?taxpro (see comments of taxprof2003, KATHETAX, and sundayp/S.Pavlok discussing threat to their business posed by RTRP regulations).

³⁶See, e.g., News Release, H&R Block, H&R Block Supports Uniform Requirements in Tax Preparation Industry, Jan. 24, 2013, available at http://www.marketwire.com/press-release/h-r-block-supports-uniform-requirements-in-tax-preparation-industry-nyse-hrb-1749573.htm (noting that, "[i]t's easy for software providers like TurboTax to say they support these regulations when they, themselves, are not directly impacted.").

³⁷See Internal Revenue Service, Return Preparer Review at 1, 6-8, Pub. 4832, Dec. 2009, available at http://www.irs.gov/pub/irs-pdf/p4832.pdf.

³⁸See Roger Russell, Tax Preparer Shortage on the Way, Accounting Today, September 7, 2012, available at http://www.accountingtoday.com/news/tax-preparer-shortage-63903-1.html ("A high percentage of the industry's most experienced tax preparers, are elderly" explained tax industry expert Chuck McCabe, "[r]ather than take the exam, many will retire.").

³⁹See Eric Kroh, Shortage of Tax Return Preparers Feared in Face of New Requirements, Tax Analysts, Dec. 2012, (attached as Ex. 2 to Alban Decl.); Roger Russell, Tax Preparer Shortage on the Way, Accounting Today, Sept. 7, 2012, available at http://www.accountingtoday.com/news/tax-preparer-shortage-63903-1.html.

⁴⁰See Roger Russell, Tax Preparer Shortage on the Way, Accounting Today, Sept. 7, 2012, available at http://www.accountingtoday.com/news/tax-preparer-shortage-63903-1.html.

⁴¹ Jonnelle Marte, Tax Prep Gets Pricier, Wall St. J. MarketWatch, Jan. 25, 2013, http://articles.marketwatch.com/2013-01-25/finance/36538398_1_tax-preparer-melissa-labant-tax-return (noting 6% increase in prices from last year, stating that "experts expect those costs to keep rising this tax season" and observing that "[t]ax preparers may also charge more for their services if they face higher costs").

⁴²See Roger Russell, Tax Preparer Shortage on the Way, Accounting Today, Sept. 7, 2012, available at http://www.accountingtoday.com/news/tax-preparer-shortage-63903-1.html (also describing the result of the regulations as creating a "bidding war" for tax preparation services).

⁴³See, e.g., Joe Kristan, Tax Roundup, 12/24/2012: The Coming Preparer Crash, Tax Update Blog, Dec. 24, 2012, http://rothcpa.com/2012/12/tax-roundup-12242012-the-coming-preparer-crash-also-a-modest-fiscal-cliff-proposal/ (noting that the regulations "will cause some taxpayers on the margin to prepare their own returns, and some to stop filing altogether.")

⁴⁴See, e.g., Jeff Stimpson, Taking the RTRP to Market, Pt. 2, Accounting Today, July 4, 2012, available at http://www.accountingtoday.com/taxprotoday/news/IRS-RTRP-Tax-Return-Preparer-NATP-EA-marketing-credential-designation63205-1.html (noting that the IRS has not begun educating the public about RTRPs, and quoting a 20-year veteran preparer and RTRP, who says the general public "doesn't understand what [the designation] is, or particularly care").

⁴⁵See Internal Revenue Service, Return Preparer Review at 29, Pub. 4832, Dec. 2009, available at http://www.irs.gov/pub/irs-pdf/p4832.pdf.

⁴⁶Id. at 49-52; Timothy P. Carney, Revolving Door Spins at Obama's IRS, The Washington Examiner, Jan.15, 2010, available at http://washingtonexaminer.com/timothy-p.-carney-revolving-door-spins-at-obamas-irs/article/33018.

⁴⁷See, e.g., David Brunori, Government Power, Cronyism, and the IRS Running Amok, Tax Analysts (undated, but published Mar. 2012), http://www.taxanalysts.com/www/features.nsf/Articles/CADF227864A5BC36852579D6005EC440?OpenDocument.

⁴⁸H&R Blockheads: the IRS Wants to Save You From Your Rogue Tax Accountant, Wall St. J., Jan. 7, 2010, available at http://online.wsj.com/article/SB10001424052748703436504574640572196836150.html.

⁴⁹Id. (originally reported in David S. Hilzenrath, IRS to Regulate Paid Preparers of Tax Returns to Reduce Errors, Wash. Post, Jan. 5, 2010 at A1 (available via Lexis)).

⁵⁰CPA-Supervised Nonsigning Preparers Exempted From Exam, Continuing Education, J. of Accountancy, Mar. 2011, http://www.journalofaccountancy.com/Issues/2011/Mar/NonsigningPreparers.htm (noting that "[i]n Notice 2011-6, the IRS carved out an AICPA-advocated exception" from the RTRP regulatory requirements); see also Internal Revenue Service, Notice 2011-6, available at http://www.irs.gov/pub/irs-drop/n-11-06.pdf.

⁵¹Guides Through the Swamp: A Big Shake-up for America's Tax-preparation Industry, The Economist, Mar. 24, 2012, available at http://www.economist.com/node/21551052

⁵² A. Barton Hinkle, Just What America Needs: More Red Tape, Richmond Times-Dispatch, Mar. 20, 2012, available at http://www.timesdispatch.com/news/hinkle-just-what-america-needs-more-red-tape/article_7ce8f616-013a-522f-8c87-de86a6fc50d6.html.

⁵³ Patrick Temple-West & Kim Dixon, IRS Rescinds Rules, Puts Tax Preparers in Disarray, Reuters, Jan. 22, 2013, available at http://www.reuters.com/article/2013/01/22/us-usa-tax-preparer-idUSBRE90L15W20130122.

⁵⁴ Internal Revenue Service, Return Preparer Review, Pub. 4832, Dec. 2009, available at http://www.irs.gov/pub/irs-pdf/p4832.pdf.

⁵⁵Id. at 13-14.

⁵⁶Id.

⁵⁷Id.

⁵⁸Id.

⁵⁹ Treasury Inspector General for Tax Administration, Accuracy of Tax Returns, the Quality Assurance Processes, and Security of Taxpayer Information Remain Problems for the Volunteer Program, available at http://www.treasury.gov/tigta/auditreports/2011reports/201140094fr.pdf.

⁶⁰ Mary Dalrymple, IRS Employees Steer Taxpayers Wrong on Tax Law, Study Finds, Associated Press, Sept. 3, 2003, available at http://accounting.smartpros.com/x40453.xml.

⁶¹ Kevin Cork, Audit Finds Poor Service at the IRS, NBC News, Apr. 13, 2005, available at http://www.msnbc.msn.com/id/7492730/ns/nightly_news/t/audit-finds-poor-service-irs/.

⁶²See, e.g., Jeff Stimpson, Taking the RTRP to Market, Pt. 2, Accounting Today, July 4, 2012, available at http://www.accountingtoday.com/taxprotoday/news/IRS-RTRP-Tax-Return-Preparer-NATP-EA-marketing-credential-designation63205-1.html (noting that the IRS has not begun educating the public about RTRPs, and quoting a 20-year veteran preparer and RTRP, who says the general public "doesn't understand what [the designation] is, or particularly care."); see also Jason T. Dinesen, 6 Tax Predictions for 2012 -- How Did I Do?, Dinesin Tax Blog (Dec. 31, 2012) http://dinesentax.com/3210/6-tax-predictions-for-2012-how-did-i-do (observing "I have heard NOTHING about the RTRP designation from the public at large. Nothing at all." And asking, "The IRS was supposed to launch a public relations campaign about the new licensing/registration requirements. Where has that campaign been?").

⁶³See Carol A. Campbell, Message from Carol A. Campbell, RPO Director, IRS Return Preparer Office Facebook Page (January 10, 2013, 8:42 AM), available at https://www.facebook.com/notes/irs-return-preparer-office/message-from-carol-a-campbell-rpo-director/394688837284100.

⁶⁴ Jeff Stimpson, Taking the RTRP to Market, Pt. 2, Accounting Today, July 4, 2012, available at http://www.accountingtoday.com/taxprotoday/news/IRS-RTRP-Tax-Return-Preparer-NATP-EA-marketing-credential-designation63205-1.html.

⁶⁵ Andrew Zajac, IRS to Build Database of Regulated Tax Preparers for Public Use, Bloomberg, July 28, 2011, available at http://www.bloomberg.com/news/2011-07-28/irs-to-build-database-of-regulated-tax-preparers-for-public-use.html.

⁶⁶Id.

⁶⁷ David R. Williams, David Williams Marks Date; Urges Taxpros to Take RTRP Test Soon, IRS Return Preparer Office Facebook Page,(June 4, 2012, 11:39 AM) https://www.facebook.com/notes/irs-return-preparer-office/david-williams-marks-date-urges-taxpros-to-take-rtrp-test-soon/309829452436706.