Greetings Fellow EAs:
Some of you may recall the legal challenge Enrolled Agents faced from New York State roughly a decade ago. The politicians in Albany decided it would be a good idea to raise revenue by licensing tax preparers and charging them $100 per year. No minimum education requirements, just the ability to rub two Grants together. Of course lawyers and CPAs would be exempt. Sound familiar? If you are not paying that $100 annually, thank NYSSEA & NAEA and renew your membership when the time comes.
That legal battle could have bankrupted the Society. NAEA, several affiliates and many members stepped up and provided much needed resources to keep us going. With apologies to Yogi Berra, it's deja vu all over again. Albany's counterparts in Carson City have had similar bright ideas. Please read the letter below from the president of the Nevada Society of Enrolled Agents. To answer the call, NYSSEA voted at the June 2 Board Meeting to donate $5000 to NVSEA's legal fund, as so many affiliates did for us when we were in need.
Kenneth R Kohlhof, EA,
The Nevada Society of Enrolled Agents needs assistance in our legal battle with the State of Nevada and the enactment of NRS 240.240 & AB 324.00. NRS 240.240 was amended under Assembly Bill 324 in May of 2017. The changes made to NRS 240.240 redefined document preparation to include enrolled agents. In laymen’s terms, this means that effective July 1, 2017 Enrolled Agents in Nevada were prohibited from:
- Preparing tax returns.
- Holding any fees for services not performed or not incurred (retainers).
- Negotiating with another person concerning the rights or responsibilities of a client (representation).
- Providing any advice, explanation, opinion or recommendation to a client about possible legal rights, remedies, defenses, options or the selection of documents or strategies (tax planning).
At this time there is no way to work as an enrolled agent preparing tax returns or representing taxpayers in collection matters, audit or appeals and comply with NRS 240.240. The law has several other additional sections that are in violation of Circular 230. As enrolled agents we are forced decide whether we will violate federal law or state law.
The Nevada legislature meets every two years for a few months. This legislation cannot be amended until February 2019 at the earliest. Among other actions, the Nevada Society of Enrolled Agents is planning a massive education outreach program to educate both the politicians and the public regarding EA’s. However, that won’t help us until the legislature meets in 2019.
This is what we’ve done so far to address the situation:
- Wednesday October 25, a delegation representing the Nevada Society of Enrolled Agents met with the Secretary of State’s office representative Gail Anderson and her assistant, Irene Jimenez-Muir. The meeting provided little clarity and no relief to the enrolled agent community.
- After exploring our options and consulting with the Government Affairs team at the National Association of Enrolled Agents, we concluded that our only recourse was to mount a legal challenge to Assembly Bill 324 & NRS240.240. The Nevada Society of Enrolled Agents Board of Directors and the officers from the two local chapters within Nevada voted unanimously to retain the legal services of Oshinski & Forsberg Ltd.
- On October 31, 2017, the Nevada Society of Enrolled Agents and two individual EA’s (Joe Decaria and Carrie Corrcoran) filed a Complaint for Declaratory Relief with the First Judicial District Court of the State of Nevada in Carson City, Nevada. The lawsuit has three plaintiffs because we were concerned that if the only plaintiff was a nonprofit cooperative association the lawsuit might get tossed out of court.
- On November 2, 2017, our attorney filed a Motion for Temporary Restraining Order and Preliminary Injunction. Judge Wilson granted the TRO. The Nevada Attorney General’s deputies agreed to allow the TRO to stand until the case can be heard. The parties also agreed to a briefing schedule for final disposition.
- On December 27, 2017, Rick Oshinski received communication from the deputy attorney general handling the case. The AG’s office wanted to acknowledge the profession of EA but still wanted all EAs to submit to licensing and all the other restrictions in the law. This settlement would have placed the enrolled agent in an untenable position. Also, this did nothing to educate taxpayers about the need for a licensed trained professional. The NSEA officers met, discussed the settlement offer and voted to reject the offer. The sentiment of the members is that we should be exempt from the law just like CPAs and Attorneys.
- On Monday January 29, 2018, our legal team filed a Plaintiff’s Motion for Summary Judgement along with exhibits. Our Motion for Summary Judgement Society was opposed by the Attorney General so we had to file an “Opposition to the Counter-Motion” on April 9, 2018.
- The A.G. again opposed the Opposition Motion so now we appear in front of Judge Wilson on Friday July 6, 2018 at 9 am. The proceeding is open to the public so anyone from the Society may attend. There is general seating behind the bar.
The Deputy Attorney General quietly indicated his belief that Nevada will lose the case. However, he believes Adam Laxalt, Nevada Attorney General will appeal to the Nevada Supreme Court.
The litigation is estimated to cost between $40,000 and $50,000. This estimate is based on costs from beginning to end. We were hopeful that the Nevada Attorney General would not put up much of a fight. However, Attorney General Adam Laxalt has political ambitions. He is running for Governor of Nevada. That is working against us. If the Attorney General loses the legal fight, we will probably end up at the Nevada Supreme Court. Hence the estimate of $50,000 in legal costs. If the state wins, we will have no choice but to appeal the decision.
We need your help.
You can help by becoming part of the education outreach program and by providing financial assistance. Our goal is to get the law permanently changed to exempt enrolled agents in the same way the law exempts CPA’s and attorneys. We plan to educate every Nevada senator and assemblyman about enrolled agents and our role in tax preparation and tax representation. We can also use your assistance financially. You were able to practice this season because of the lawsuit we filed. Any contribution to either our legal battle or to our education fund is greatly appreciated.
Thank you in advance for your time and attention to this matter. If you wish to discuss this matter further or if you need additional information, please call me at (775) 323-4440 or (775) 233-7183 cell.
Janet Vick, EA