United States District Court, District of Columbia
C. LAMBERTH, UNITED STATES DISTRICT JUDGE.
the Court is the government's motion for a stay of this
Court's order enjoining the Internal Revenue Service
("IRS") from charging fees to issue a preparer tax
identification number ("PTIN"). Upon consideration
of the pleadings, the record, and the relevant law, the Court
will DENY the motion for a stay.
explained in detail in this Court's prior memorandum
opinion, ECF No. 78, this case concerns 2010-2011 regulations
promulgated by the Treasury Department and the IRS regarding
tax return preparers. Plaintiffs challenged the
government's legal authority to require PTINs and PTIN
fees. On June 1, 2017, this Court issued its opinion and
order on the parties' cross-motions for summary
judgement. ECF Nos. 78-79. The Court found that although the
IRS had the legal authority to require PTINs, it may not
charge fees for issuing PTINs. The Court explained that the
IRS's PTIN regulations were interrelated to the
regulations concerning exam and education requirements for
tax preparers that were struck down in Loving v.
I.R.S., 742 F.32d 1013 (D.C. Cir. 2014). Charging fees
for PTINs is the equivalent of imposing a regulatory
licensing scheme-an authority that the Loving court
established the IRS does not have. Loving, 742 F.3d
at 1015. Moreover, the Court found that obtaining a PTIN
number is no longer a "service or thing of
value"-the standard required to impose a fee under the
Independent Offices Appropriations Act of 1952
("IOAA")-because anyone can now obtain a PTIN
thanks to Loving. On July 10, 2017, the Court
entered its final judgment in this matter, permanently
enjoining the IRS from charging PTIN fees, among other
orders. ECF No. 82.
24, 2017, pursuant to Federal Rule of Civil Procedure 62, the
government moved for a stay of the Court's permanent
injunction during the pendency of an appeal. On September 6,
2017, the government field its notice of appeal to the D.C.
Federal Rule of Civil Procedure 62(c), "[w]hile 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." The D.C. Circuit has made clear that a
"court's decision to stay its final judgment pending
appeal is an extraordinary remedy that constitutes an
'intrusion into the ordinary process of... judicial
review."' Friends of Capital Crescent Trail v.
Federal Transit Administration, 2017 WL 2781446 (D.D.C.
2017) (quoting Men v. Holder, 556 U.S. 418, 427
determining whether to grant a stay pending an appeal, the
Court must consider the following 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 (D.C. Cir. 1985).
D.C. Circuit traditionally evaluated these four factors using
a "sliding-scale" approach-meaning that a
"strong showing on one factor could make up for a weaker
showing on another." Sherley v. Sebelius, 644
F.3d 388, 392 (D.C. Cir. 2011). Although the Supreme Court in
Winter v. Natural Res. Def. Council, Inc., 555 U.S.
7 (2007), suggested that the four factors should be treated
independently, the D.C. Circuit has yet to hold that the
sliding-scale approach should no longer be used.
Sherley, 644 F.3d at 392-93.
government notes that in the context of a stay proceeding it
can establish likelihood of success on the merits-the first
factor in the test-by raising "questions going to the
merits so serious, substantial, difficult and doubtful, as to
make them a fair ground for litigation and thus for more
deliberative investigation." Comm. on Judiciary of
U.S. House of Representatives v. Miers, 542 F.3d 909,
911-12 (D.C. Cir. 2008) (internal quotations omitted). In
other words, if the other three factors weigh heavily in
favor of a stay, a lesser showing on the first factor is
sufficient to meet the government's burden.
Washington Metropolitan Area Transit Commission v.
Holiday Tours, Inc., 559 F.2d 841, 843 (D.C. Cir. 1977).
The Court need not conclude whether a sliding-scale test of
this sort survives Winter, as the government fails
to meet its burden even under this lower standard.
Likelihood of Success on the Merits
government argues that this case raises serious questions
going to the merits for three reasons:
(1) this Court's decision conflicts with decisions from
the Eleventh Circuit and Northern District of Georgia; (2)
the PTIN and RTRP [-the registered tax return preparer-]
regulations are sufficiently independent from each other to
justify both the PTIN requirement and user fee; and (3) the
statute and ...