## Facts

- The IRS issued 2011 regulations requiring many paid tax-return preparers to pass an exam, pay annual fees, and complete 15 hours of continuing education each year.
- The IRS estimated the rules would apply to roughly 600,000 to 700,000 preparers.
- The IRS relied on 31 U.S.C. § 330, which authorizes Treasury to “regulate the practice of representatives of persons before the Department of the Treasury.”
- Three independent tax-return preparers sued, alleging the regulations exceeded the IRS’s statutory authority.
- The district court entered a permanent injunction barring enforcement of the regulations.
- The IRS appealed, disputing only whether § 330 authorized regulation of tax-return preparers.

## Issues

1. Whether paid tax-return preparers are “representatives of persons” engaged in “practice…before the Department of the Treasury” under 31 U.S.C. § 330.
2. Whether § 330 authorizes the IRS to impose testing, continuing-education, and registration requirements on tax-return preparers who prepare and file returns.

## Decision

- The D.C. Circuit affirmed the district court’s injunction and held the regulations invalid.
- The court concluded § 330 does not extend to tax-return preparers who merely prepare and file returns.
- The court determined that “representatives” in § 330 refers to agents with authority to act on a taxpayer’s behalf in dealings with Treasury, not preparers who lack authority to bind taxpayers.
- The court interpreted “practice…before” Treasury to refer to participation in adversarial or agency proceedings, not return preparation and filing.
- The court found the statute’s text, history, structure, and context foreclosed the IRS’s reading, making deference unavailable.

## Legal Principles

- Statutory authority to “regulate the practice of representatives…before” an agency is read in light of ordinary meaning and established usage, which generally connotes agency advocacy or proceeding-based representation rather than form preparation.
- A “representative” under § 330 is an agent with legal authority to act for another before the agency; return preparers who lack authority to bind taxpayers are outside that category.
- Longstanding executive practice and historical context can confirm the limited scope of an old statutory delegation, especially where the asserted power would materially expand agency regulation.
- When traditional interpretive tools show that a statute does not authorize an agency’s program, an agency cannot rely on interpretive deference to sustain the regulation.

## Conclusion

The court held that 31 U.S.C. § 330 does not authorize the IRS to impose a broad licensing-style regime on paid tax-return preparers, and it affirmed a permanent injunction barring enforcement of the 2011 testing, fee, and continuing-education requirements.


Loving v. Internal Revenue Serv., 742 F.3d 1013 (D.C. Cir. 2014)