By Tom Rhodes 2/14/2012
Last year the IRS created new crony regulation to protect big business. This should come as no surprise. Congress never authorized, nor grated the authority, nor created any law that allows the IRS to require third party tax preparers to get an IRS license; period! The IRS just magically decided that it has the authority, far in excess of any authority Congress deligated.
This is a new rule, not law, that H&R Block and other big tax companies that can lobby government love, they didn't even bother with a law. It's pure big-business protectionism. The Wall Street Journal simply explained it saying; "Cheering the new regulations are big tax preparers like H&R Block, who are only too happy to see the feds swoop in to put their mom-and-pop seasonal competitors out of business."
A friend of mine every year purchases the full blown version of Quicken's Turbo Tax, does his families taxes, and does taxes for a few of his senior citizen neighbors who don't have a computer and are troubled with the complexity of modern IRS rules and regulations. He charges $25 bucks and if the tax return is more complicated than his $39 software program can handle, he doesn't charge and tells the person to find an accountant. He helps out about a dozen people every year. Not a big money maker, but as a school teacher in a rural county, it helps out. The IRS wants to make this illegal, the only logical reason is to help out H&R Block, not protect the average tax payer. Since the IRS requires third party preparers to sign tax forms, it's easy for them to track people who abuse the tax code, etc. The arguments requiring a license to protect taxpayers are false. It is just another government power and money grab.
Without law, this new regulation is typical big government cronyism protecting favored businesses. This regulation benefits only powerful industry insiders and at the expense of mom and pop business and consumers. The result will be less competition, fewer options for tax payers, and higher prices. People, including tax preparer's right to earn a living without government permission from the IRS are being curtailed. Tax payers, not the government, should be the ones who decide who, if anybody, helps them prepare their taxes. Soon you won't even be allowed to do your own taxes, you'll have to have a "licensed" tax preparer prepare your taxes.
The good news is that yesterday, the Institute for Justice and several independent tax preparers filed suit against the IRS challenging its authority to impose a licensing scheme. The Institute for Justice estimates that this will affect about 350,000 tax return preparers
The Wall Street Journal reports that IRS Commissioner Douglas Shulman said, "In most states you need a license to cut someone's hair." as the rationale for inventing a new licensing scheme. Using abusive licensing regulations, which limit competition, as justification for more licensing regulations, is absurd. This like the massive amounts of new regulations Obama has instituted is killing economic growth.
This is just another example of the Obama administration doing an end run around congress, legislating without the legislature. It is just another method for Obama and Co. to generate revenue through administrative fiat, rather than through the constitutional process. Over the past century we have done well without needing a license from the IRS to do our taxes; there has not been a huge amount of tax fraud by independent tax preparers not associated with big business like H&R Block; so why the need, and if there is a need why bypass the normal legislative process? Why does Obama want to control yet another part of private business, and grant still more power to corporations? Could it be they want control of how taxpayers use legal deductions to minimize their taxes? If it's tax abuse which they are worried about why not drastically simplify the tax code as promised?
The Uniform Certified Public Accountant Examination is the examination administered to people who wish to become Certified Public Accountants (CPA's). This exam is developed and maintained by the American Institute of Certified Public Accountants (AICPA), and is administered by the National Association of State Boards of Accountancy (NASBA). Although the CPA exam is used by the regulatory bodies of all fifty states it is a private certifying body. People should be free to choose to use a CPA to prepare their taxes if they wish. They should also be free to have somebody who is not "certified" prepare their taxes so long as the preparer is open and honest about their qualifications. The need for a government license is redundant and not necessary. The government's sole role should be to protect individuals from those who would fraudulent claim to have qualifications they don't, not to require individuals to use "certified" individuals for services. Although I may want to use an ASCE certified mechanic, there isn't nor should be a law requiring I use one to repair my auto. If I want to hire the neighborhood shade tree mechanic, that should be between me and him, so long as doesn't dishonestly lie about his credentials.
This should apply to Doctors, Lawyers, Barbers, etc. private board certifications should be recommended, but so long as people are honest about their qualifications, people should be free to trade goods and services without government interference. Why shouldn't a marine corpsman with years of experience doing battle field wound care, stitching up soldiers in the field and treating emergency wounds of all types, not be allowed to offer those services to the public when he returns and is discharged from the military. I'd just as soon pay a veteran corpsman to sew up my arm after a home accident, than pay outrageous hospital ER prices. Provided he's honest about his training and experience, he should be allowed to compete with other health care providers, letting the consumer of health care services make the choice between AMA certified doctor or experienced US Marine corpsman or local witchdoctor. This of course would end the AMA monopoly, and put a severe ding in the monopoly on health care that has proven to drive prices through the roof. All occupational licenses are just scheme's to protect entrenched guilds, not truly protect the consumer. Imagine having to have a license to tell somebody what lamp or color would look best in your house, an interior design license, but that is exactly what the existing entrenched interior designers want, protection from the completion of startup designers. Corporate cronyism, not real consumer protection, is what licensing is about. H&R Block wants the IRS tax preparer license, because it protects their business, and will allow them to charge more.
Constitutionally we have a system of checks and balances that separates government power designed to make it difficult for the federal government to enact laws restricting the liberty of the people, and specifically designating what powers the federal government has, and what powers each branch of government has. Obama has made it clear that he does not like the constitutional restrictions which limit his ability to get laws he wants. Laws do not come from one single man in the President, they must come from the legislature, and revenue generating laws must originate in the House. IRS licenses will generate revenue for the IRS, thus laws granting that authority must originate in the House of Representatives, not the IRS bureaucracy. What constitutional authority does the federal government have to institute occupational licenses? From Doctors to CPA's to Lawyers, to Barbers, all occupational licensing has always been thepurview of the States. Clearly the federal government has no constitutional authority to create a law licensing tax preparers, and bypassing congress to create such a "rule" is clearly unconstitutional on many grounds.
The Obama administration unmistakably considers the rule of law and any constitutional limits on the power of the Executive branch to be passé, defunct, outdated, outmoded, null and void. Lucky for Obama the people of the USA have become a passive nation of cowards unwilling to stand up to tyranny. Unlucky for Obama is the fact that the morals of the people are also vanishing, and we are seeing and soon will see even more massive amounts of people just ignoring the law. Once the government has shown that it is not obligated to follow the rules set forth in the constitution, the people are no longer obligated to follow the "rules" set forth by such a government. This year despite the new IRS "rule," my friend is still preparing taxes for seniors without official approval by the government, he just does so illegally using internet based tax programs from a computer at public library as if he were the senior preparing their own taxes, and instead of declaring that income on his taxes is insisting on cash. Any moral obligation to follow the law is no longer valid because the government has publicly and officially said that it is no longer under any obligation to do the same. The prima facie moral obligation to follow the IRS "rule" is superseded by the right of all individuals to work and be compensated for their labor. You don't nor should you ever, have to gain permission from some lord or master to work for yourself or another.
RIP: Rule of Law, slain by B.H. Obama 2012.