The United States Internal Revenue Service (IRS) has lost its appeal on the reforms of rules for tax preparers against the ruling by the court that ordered to stop enforcing regulatory requirements on tax return preparers. The ruling is important for tax compliance because more than one-half of all individual taxpayers pay someone to prepare their returns each year.

The District Court had ruled that the IRS misused its authority as it wants all tax preparers to be registered with it and incorporating the provision of competency testing and continuing education under its Registered Tax Return Preparer Program.