Big Tax Prep And Big Government Go Hand In Hand
From the wonderful Institute for Justice -- "Litigating for Liberty," Congress never gave the IRS the authority to license tax preparers, and the IRS can't give itself that power. But, hey, why should they let that stop them?

Last year the IRS imposed a sweeping new licensing scheme that forces tax preparers to get IRS permission before they can work. This is an unlawful power grab that exceeds the authority granted to the IRS by Congress.

The burden of compliance will fall most heavily on independent tax return preparers and small businesses. Unsurprisingly, big firms such as H&R Block and Jackson Hewitt support the licensing scheme. As The Wall Street Journal explained: "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."

These regulations are typical government protectionism. They benefit powerful industry insiders and at the expense of entrepreneurs and consumers, who will likely have fewer options and face higher prices. But tax preparers have a right to earn an honest living without getting permission from the IRS. And taxpayers--not the IRS--should be the ones who decide who prepares their taxes.

That is why on March 13, 2012, three independent tax preparers joined the Institute for Justice in filing suit against the IRS in the U.S. District Court for the District of Columbia. This lawsuit challenges the IRS's statutory authority to impose this licensing scheme, and seeks to overturn regulations that would affect an estimated 350,000 tax return preparers, forcing many of them to stop working in the occupation of their choice.

From the WSJ piece:

Under the plan, which would begin with the 2011 tax season, anyone who takes money to help people with their taxes will have to register with the IRS, and eventually pass competency tests and sign up for continuing education. So having made tax filing so complicated that most Americans need help with their forms, Washington now wants to raise the price of such counsel by regulating advisers in a way that may reduce their supply.

Defending the decision, IRS Commissioner Douglas Shulman declared that regulating tax preparers was reasonable because "In most states you need a license to cut someone's hair." Yes, the cosmetology guild does like to raise the barriers to entry for competitors.

Here's the video from the IJ:

My tax guy is terrific. He's an independent with a small family firm, working out of a storefront in Burbank. He has integrity and does a great job on my taxes -- and is both friendly and soothing throughout the process. My architect neighbors were so enthusiastic about him that I couldn't help but switch to him. He's seriously far from my house, and I hate driving all that way from the west side of LA, but he's worth it. And that should be license enough.