IRS User Fee 1. State the administrative agency which controls the regulation. Explain why this agency and your proposed regulation interests you. The Internal Revenue Service (IRS) controls the User Fees Relating to Enrollment and Preparer Tax Identification Numbers. This regulation is found in the Federal Register. A copy of the regulation is included as a separate .PDF document. As a tax preparer this regulation interests me. This will increase my cost of doing business. 2. Describe the proposal/change. The proposed fee for the Personal Tax Identification Number (PTIN) will increase my costs of doing business. 3. Write the public comment which you would submit to this proposal. If the proposed regulation deadline has already passed, write the comment you would have submitted. Explain briefly what you wish to accomplish with your comment. My comment is that as a tax preparer in California, I already pay tax preparer fees to the state regulatory agency, California Tax Education Council. This new fee for using a PTIN, which I have used for over ten years, will increase my cost of doing business. This cost may have to be passed on to customers in what is already a tight economy. I wish to be exempt from this new fee. 4. Provide the “deadline” by which the public comment must be made. (If the date has already passed, please provide when the deadline was). The public comment period expired on 08/23/10. 5a. Once you have sub mitted your comment, what will you be legally entitled to do later in the promulgation process (if you should choose to do so)? I am requesting to be exempt from paying this fee. Under the Administrative Procedure Act, I have the right to “appeal” the fairness of this new fee given the annual fees I am required to pay as a registered tax preparer in the state of California. I will have to determine which theory would be the most applicable to have this fee revoked or be exempted from it. 5b. If the proposal passes, identify and explain the five legal theories you could use in an attempt to have the regulation declared invalid and overturned in court. The five legal theories under which can be used in an attempt to the regulation declared invalid are as follows: Arbitrary and Capricious This theory challenges proposed regulation on the ground that the rule is arbitrary, capricious, an abuse of discretion, or in violation of some other law. It is generally applied to informal rulemaking and requires the agency to show evidence to support the proposed rule. Without such evidence, the rule can be held to arbitrary and capricious (Jennings, 2009).

Substantial Evidence Test This test is applied in the review of formal and hybrid rulemaking on the ground that the regulation is unsupported by substantial evidence (Jennings, 2009). Ultra Vires This theory challenges a regulation on the ground that it goes beyond the authority given to the agency in its enabling act. Ultra vires is a Latin term meaning “beyond its powers” (Jennings, 2009). Sunset Law Under this law Congress creates an agency for a limited period of time during which the agency must establish its benefits and other justification for its continuation (Jennings, 2009). Zero-Based Budgeting Some agencies are controlled by congressional budgets. Some agencies don’t automatically receive a budget amount but rather starts with a zero budget each year and then is required to justify all its need for funds. This type of control gives Congress a say from one year to the next in how the agency is operating (Jennings, 2009). 5c. Which of these challenges would be the best way to challenge the regulation you selected for this assignment if you wanted to have the regulation overturned and why? The best way to challenge the PTIN fee is under the arbitrary and capricious theory. PTIN’s have existed since as far back as I can remember. I first volunteered to prepare tax returns in 1980. At that time I was assigned the PTIN I currently used as a paid tax preparer. Once that number is issued, it doesn’t change. Additionally, as a tax prepared in California, I am subject to annual registration fees per state regulation. The IRS regulation proposed to charge a fee annually for the use of a PTIN which is the required identifier paid tax preparers must use on tax returns.

Reference Jennings, M.M. (2009), Business: Its Legal, Ethical, and Global Environment. Cengage Learning:Mason, OH