United States District Court, District of Columbia
Daniel L. Alban, Scott G. Bullock, Arlington, VA, for Plaintiffs.
Joseph E. Hunsader, Geoffrey John Klimas, U.S. Department of Justice, Washington, DC, for Defendants.
MEMORANDUM OPINION AND ORDER
JAMES E. BOASBERG, District Judge.
On January 18, 2013, this Court issued a decision granting Plaintiffs' Motion for Summary Judgment and enjoining the Internal Revenue Service from enforcing its new regulatory scheme for registered tax-return preparers. See Loving v. IRS, No. 12-385, 917 F.Supp.2d 67, 2013 WL 204667 (D.D.C. Jan. 18, 2013); ECF No. 21 (Order). The IRS now asks the Court to stay the injunction pending its appeal to the D.C. Circuit. Because the Court finds that the relevant factors weigh against such a stay, it will deny the Motion. The Court will, however, modify the injunction to make clear that its requirements are less burdensome than the IRS claims.
In considering the request for a stay, it is important to state clearly what is at issue here and what is not. Plaintiffs make manifest in their pleadings that their lawsuit does not challenge the IRS's requirement that each tax-return preparer obtain a preparer tax-identification number (PTIN). See Opp. at 1-2. Indeed, Congress has specifically authorized the PTIN scheme by statute. See 26 U.S.C. § 6109(a)(4). That scheme, therefore, does not fall within the scope of the injunction and may proceed as promulgated, except that the IRS may no longer condition PTIN eligibility on being " authorized to practice" under 31 U.S.C. § 330. See 26 C.F.R. § 1.6109-2(d) ( " [B]eginning after December 31, 2010, to obtain a preparer tax identification number or other prescribed identifying number, a tax return preparer must be an attorney, certified public accountant, enrolled agent, or registered tax return preparer authorized to practice before the Internal Revenue Service under 31 U.S.C. 330 and the regulations thereunder." ). What Plaintiffs do challenge— and what the Court has enjoined— are the requirements that tax-return preparers (who are not attorneys, CPAs, enrolled agents, or enrolled actuaries) must pay some fees unrelated to the
PTIN, pass a qualifying exam, and complete annual continuing-education requirements. See Loving, 917 F.Supp.2d at 69, 2013 WL 204667, at *1.
By way of additional background, both sides agree that the current deadline to complete the qualifying exam is December 31, 2013, and that earlier this year, before the Court's decision, the IRS indicated that the required continuing-education hours for 2012 may be made up in 2013. See Mot. at 8; Opp. at 8; Reply at 5 n. 4. As a result, were the injunction lifted, preparers would have until the end of this year to complete these requirements.
II. Legal Standard
Federal Rule of Civil Procedure 62(c) provides: " While an appeal is pending from [a] ... final judgment that grants ... an injunction, the court may suspend [or] modify [the] ... injunction on ... terms that secure the opposing party's rights." Although no notice of appeal has yet been filed, that is not a prerequisite for relief under this Rule so long as there is reason to believe an appeal will be taken. See Common Cause v. Judicial Ethics Comm., 473 F.Supp. 1251, 1254 (D.D.C.1979); 11 Wright & Miller, Federal Practice and Procedure § 2904, at 707-08 (3d ed. 2012). The IRS's representations to that effect here are sufficient for it to invoke Rule 62(c). See Reply at 1.
To assess the propriety of a stay pending appeal, the Court looks to four factors: " (1) the likelihood that the party seeking the stay will prevail on the merits of the appeal; (2) the likelihood that the moving party will be irreparably harmed absent a stay; (3) the prospect that others will be harmed if the court grants the stay; and (4) the public interest in granting the stay." Cuomo v. Nuclear Regulatory Comm'n, 772 F.2d 972, 974 ...