A federal appeals court on Wednesday upheld a ruling that the Internal Revenue Service’s tax-exempt tax-prep software is discriminatory against people who don’t have a high school diploma.
In a decision that also applies to some of the state and local tax preparers, the court found that the software “is discriminatory against individuals with high school diplomas who can’t afford to pay higher taxes.”
Tax-prep companies were not immediately available for comment.
The IRS, in a statement, said the ruling would not impact the IRS’s efforts to make tax-free refunds for millions of taxpayers.
The ruling was based on the IRS interpretation of the statute that says the tax preparer must take a deduction for the expenses of preparing and submitting the tax return.
It was not immediately clear what the ruling means for the IRS.
The tax prepareress and other tax prepareers are required to report any expense they incur.
The rule is designed to protect taxpayers by discouraging frivolous tax preparation and evasion.
It’s also meant to help ensure that taxpayers are not under-reporting their incomes.
Tax-free credit available to taxpayers who don�t have a bachelor�s degree or higher Source Fox News article The decision comes as the IRS seeks to make more than $1.5 trillion in tax-preparation credits available to millions of Americans, a move that would help millions of people who cannot afford to hire an accountant.
The agency last month announced a $1,000 tax credit for anyone with a high-school diploma who does not have a master�s or professional degree.
The refund, which would apply to all taxpayers filing tax returns on or before January 31, 2019, would be available for taxpayers who work as part of an exempt organization.
The exemption would apply only to people who work for or on behalf of a nonprofit, nonprofit corporation, or governmental entity, the IRS said.
The program has been criticized for being too limited and not broad enough.
Critics say the IRS�s tax credit is designed only to help those who need help the most.
It does not apply to those who are self-employed or have a spouse or partner who is an IRS employee.