Coyote is wondering about some of the claimed consumer protection rationales.
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Reminds me of the CPSIA, that really increases the costs for the smaller company while doing nothing to really regulate the cause of the problem. Likewise, “Block”, who has been in trouble like Hasbro, won’t be affected because they can afford the licensing, unlike the solo or small preparer.
Lobbying for regulations to keep down the little guy is against capitalism. The government needs to make sure that regulations don’t cost the little guy a larger percentage of income than the big players. It is exactly like CPSIA or the Anti-dog-eat-dog act from Atlas Shrugged.
The rationale is in my opinion quite simple.
The IRS can control what advice and information tax preparers give to clients i.e. they can in the future ban advice on in their mind questionable itemized deductions, tax shelters etc.
They could also be able to include a provision that tax preparers have to disclose certain transactions.
The statement “We require licensing for barbers, but not for tax preparers” may be a statement that we shouldn’t require licensing for barbers.
Bob
In the end, its all about money and control.
Don’t accountants and tax preparers already take a CPA exam? Why do they need further licensing to prepare taxes?
Benjamin,
CPA’s take the CPA exam. Tax preparers, such as those who work at H&R Block and your local payday loan/tax preparation shop, do not take any exam administered by any government body. (At least not in Louisiana.) And most of the preparers at places such as Block and Jackson-Hewitt are temporary employees who are given a few day course on tax basics. For the vast majority of the people who go to these shops, the preparer is entering information into a software program after asking a few questions from a questionnaire. The majority do not have any complicating factors and their returns are pretty straight forward. They will generally have someone on hand who has more experience, such as the franchise owner, for those who’s returns are more complicated, though that person is rarely a CPA or other licensed professional.
(Disclaimer: The information is hearsay from an acquaintance whose family owns and H&R Block franchise. I have never been to one.)
Call me crazy, but it doesn’t seem that one should need to be licensed to prepare taxes. Shouldn’t it be easy enough that every American (since we all have to do them) should be able to submit them fairly easily.
Unless you own a business in which case it pays to hire a real accountant rather than go it your own or the filing mills.
I thought the main “benefit” to the filing mills is that for a cut of the check they’ll pay your refund quicker. Which is of course stupid because it’s your own money you’re getting back.
While I am no fan of more licensing (I got my first federal license at age 15 by reading the study guide on the bus ride to Kansas City, didn’t inspire me with much faith in the system), but an up close and personal “test” of tax preparers by a group of college students in Alabama found incredible disparity between tax preparer’s ability, honesty and fees. They were calling for licensing for preparers within the state and in all honesty they apparently need it. Sadly the state legislature just looked the other way.
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