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Last week, a Washington D.C. federal court was asked to certify a Class of tax preparers who are charged an annual fee by the U.S. Internal Revenue Service.
Lead plaintiffs Adam Steele, Brittany Montrois, and Joseph Henchmen allege in their class action lawsuit that it is unlawful for the IRS to require a $50 annual charge in order to obtain a preparer tax identification numbers (PTIN).
PTINs are unique to each tax filer, stay fixed and do not change year to year, much like an individual’s Social Security number. In 2010, the IRS changed their policy and instituted the $50 PTIN fee along with strict penalties against tax preparers who do not pay the yearly fee, according to the class action lawsuit.
In their motion to certify the Class, the plaintiffs argue that there are more than 1 million tax preparers who were each similarly charged $50 per year by the IRS in exchange for preparer tax identification numbers. The plaintiffs contend that their claims are “ideally suited for class treatment.”
“This case challenges a uniform governmental practice that affects all putative class members: charging a PTIN fee to every tax-return preparer every year,” the plaintiffs say in their motion seeking certification of the tax preparer class action lawsuit. “And the complaint seeks equitable relief that would prohibit the IRS from imposing PTIN fees in the future,” they continue.
In 2010, the IRS instituted the fee along with other regulations over tax preparers. The class action lawsuit, which was filed in September 2014, alleges the agency’s 2010 decision to create the fee and the penalties for avoiding it go against the IRS’s statutory authority. In July, U.S. District Judge Royce C. Lamberth consolidated another case with the putative class action lawsuit.
The class action plaintiffs argued in their motion seeking certification of their proposed Class, numbering between 700,000 and 1.2 million potential Class Members, that bringing the claims in a class action lawsuit is the most appropriate route.
The plaintiffs point out that because of the massive amount of potential claimants involved, the action meets the requisite numerosity requirement. Additionally, it would be impractical to try so many cases individually, say the plaintiffs. Though the numbers of potential Class Members is large, identifying them should be easy, they argue, because contact information should be available through the payment system.
“This class is manageable because the government itself has all the information needed to identify and notify every class member, including their names and email addresses,” point out the plaintiffs in their motion seeking certification of the tax preparer class action lawsuit. “Class counsel can send notice to the email addresses the IRS has on file for all PTIN recipients.”
Adam Steele and Brittany Montrois are represented by Stuart J. Bassin of The Bassin Law Firm PLLC.
The IRS PTIN Fee Class Action Lawsuit is Adam Steele and Brittany Montrois, et al. v. United States of America, Case No. 1:14-cv-01523, in the U.S. District Court for the District of Columbia.
UPDATE: A judge has granted Class certification to a group of tax preparers who were charged a fee to obtain or renew a preparer tax identification number (PTIN).
UPDATE 2: On June 1, 2017, a federal judge found that the IRS does not have authority over tax return preparers and must refund PTIN fees.
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3 thoughts onCert. Sought in IRS PTIN Fee Class Action Lawsuit
UPDATE 2: On June 1, 2017, a federal judge found that the IRS does not have authority over tax return preparers and must refund PTIN fees.
UPDATE: A judge has granted Class certification to a group of tax preparers who were charged a fee to obtain or renew a preparer tax identification number (PTIN).
I have a PTIN number but because I was no longer was able to work at a popular tax company. I had to pay a fee to use it. I was not able to pay the fee so i stopped preparing taxes. What can i do if anything?