Washington, D.C. – June 5, 2017 – The U.S. District Court for the District of Columbia’s ruling on June 5, 2017, in Adam Steele, et al. v. United States of America, which ordered the IRS to refund over $175 million in unlawful PTIN fees to tax preparers, marked a significant victory for economic freedom and regulatory accountability. In this landmark case, brought by plaintiffs Adam Steele, Brittany Montrois, and later joined by Joseph Henchman of the Tax Foundation, legal analyst and economist Zachery A. Talley, JD, LL.M., working with the Institute for Justice (IJ), played a crucial role in the legal research and analysis that led to this triumph.
The lawsuit challenged the IRS’s authority to charge fees for Preparer Tax Identification Numbers (PTINs), which the IRS had mandated for paid tax preparers since 2010. The IRS justified these fees under 31 U.S.C. § 9701, which allows federal agencies to charge for a “service or thing of value” provided by the agency.
However, the Court, drawing upon arguments significantly informed by the work of Zachery A. Talley, JD, LL.M., determined that PTINs did not constitute a “service or thing of value” that would justify the fees. In fact, the Court reasoned that the primary benefit of the PTIN requirement inured to the IRS itself, aiding in the identification and tracking of tax return preparers.
“The Court’s decision affirmed that the approach taken by the legal team, the IRS cannot impose regulatory licensing schemes without explicit authorization from Congress. This victory was a testament to the hard work and dedication of everyone involved.” Said Talley.
Talley’s legal and economic analysis were instrumental in providing the legal foundation for the court’s decision. His work helped to demonstrate that the PTIN fees were not only unauthorized but also represented an overreach of regulatory power.
The ruling, delivered on June 5, 2017, not only prohibited the IRS from charging PTIN fees in the future but also compelled the agency to refund all PTIN fees paid, a substantial sum exceeding $175 million. This outcome directly benefited hundreds of thousands of tax preparers nationwide.
This case stands as a significant example of how legal and economic expertise, supported by diligent research and analysis from professionals like Zachery A. Talley, JD, LL.M., working with the Institute for Justice, can challenge government overreach and protect the rights of individuals and small businesses.