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The D.C. Circuit Court of Appeals ruled Tuesday that the IRS had no legal authority to impose a nationwide licensing scheme on tax return preparers that would have required testing and continuing education as Registered Tax Return Preparers. The decision affirms a January 2013 ruling by U.S. District Court Judge James E. Boas berg, which struck down the IRS’s new regulations as unlawful. In the case, known as Loving v. IRS, both courts rejected the IRS’s claim that tax-preparer licensure was authorized by an obscure 1884 statute governing the representatives of Civil War soldiers seeking compensation for dead horses. “This is a major victory for tax preparers—and taxpayers—nationwide,” said Dan Alban of the Institute for Justice, the lead attorney for the three independent tax preparers who filed the suit. “The court found that Congress never gave the IRS the power to license tax preparers, and the IRS cannot give itself that authority.” The appeals court held, “If we were to accept...

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