Ridgely sued the IRS, arguing that the Service exceeded its authority under Circular 230 in regulating the preparation and filing of ordinary refund claims, which practitioners file after a taxpayer has filed his original tax return but before the IRS has initiated an audit of the return. Ridgely contended that the inability to charge a contingent fee for a refund claim cost him clients and significant revenue. Under a contingent fee arrangement, the client only pays the fee (or a percentage of the refund) if the claim is successful.