H&R Blocked! Big Government, Big Tax Prep Bullies Squashed By IJ
The fantastic Institute for Justice won an important victory -- with a federal judge barring the IRS from imposing a bunch of new regulations, including a competency exam, on thousands of mom 'n' pop and other non-corporate tax preparers. From the WaPo:
Since 2011, in response to what it says has been a growing problem of poorly done returns, the IRS has sought to impose a series of new regulations on tax preparers. That included a requirement to pass a qualifying exam, paying an annual application fee, and taking 15 hours annually of continuing-education courses.Attorneys and certified public accountants would have been exempt from the regulations.
The Institute for Justice argued that the IRS lacked the statutory authority to impose the regulations and said they would put tens of thousands of mom-and-pop tax preparers out of business, because the regulations were onerous and create a competitive disadvantage to the attorneys and CPAs who were exempt.
The problem of "poorly done" returns perhaps links back to how utterly disgustingly complicated our tax code is.








I wonder when the Institute for Justice will go after one of the biggest guilds of them all: lawyers.
I would love to see a McKinsey or some think tank devise a legal system much simplified, and in which clerks trained in certain cores could execute the bulk of.
Really, law should be a pink-collar ghetto, paying about $25 an hour.
And the lawyers at Institute of Justice? What do they say about that?
Giant Thinker at January 18, 2013 11:55 PM
I like how the IRS has acknowledged here that "regular people" aren't qualified to file income taxes, yet we can still be prosecuted and imprisoned for failing to do so or for doing it wrong.
Unfrozen Caveman at January 19, 2013 6:50 AM
Amy Alkon
https://www.advicegoddess.com/archives/2013/01/hr-blocked-big.html#comment-3565518">comment from Unfrozen CavemanGreat point, Unfrozen.
Amy Alkon
at January 19, 2013 7:27 AM
I can tell you for a fact I have called the IRS three times asking the same question...and gotten three different answers.
They have no clue what they're doing, so I don't see how they can say anyone else can do any beter.
Daghain at January 19, 2013 8:40 AM
Hahaha! A qualifying exam! How will anyone at the IRS know whether a person taking the exam gave the right answers?
Ken R at January 19, 2013 9:56 AM
"The problem of "poorly done" returns perhaps links back to how utterly disgustingly complicated our tax code is."
Yes, this is exactly right. I have always done my own taxes and wondered how other folks have faired. Especially when I worked in NY; but lived in NJ; filing Fed, NY state, NY city (when they had out-of-state-workers pay local tax) and NJ was all very mind-blowingly complex. I couldn't help but think as I struggled with all the forms, "I am not a stupid person, am college-educated, how the hell does someone with a lesser education do this?"
Charles at January 19, 2013 11:08 AM
The legal profession is increasingly a pink collar ghetto. The US would do well to turn law school into an undergraduate degree, as it is elsewhere in the world, and design the education to train people to perform the basics of the trade.
For most attorneys, specialization happens on the job or can be gained in what is known as an LLM. The three years of law school on top of 4 years of undergraduate education, and then a bar exam, and yearly CLE requirements... irrelevant and insanely expensive.
Lawyers better than anyone know that this is a huge racket.
I say this as a 2008 graduate of a US law school who has trained and worked with attorneys from around the world.
Michelle at January 19, 2013 11:39 AM
> a pink collar ghetto
Fun new descriptor!
Crid [CridComment at gmail] at January 19, 2013 12:23 PM
I wonder what they would say about preparers using TurboTax?
Would they be messily prepared still?
Jim P. at January 19, 2013 6:00 PM
See "Pink Collar Workers," by Louise Kapp Howe, published in 1977.
Law firms used to hire newly minted attorneys to perform document review, and then train them up the ladder (or not).
This task is now farmed out to contractors at a much lower hourly rate, with no benefits. A long overdue market correction. Most discovery work is handled by computers, and one small study explores whether high schools students can handle the remaining review analysis at least as well as attorneys. Certainly 7 years of post-high school education is overkill.
http://e-discoveryteam.com/2012/09/16/analysis-of-the-official-report-on-the-2011-trec-legal-track-part-two/
So, these document review gigs are now dead end jobs in a profession increasingly dominated by women.
I do think that there are lawyering skills that require intelligence, thoughtfulness, and study to develop - however seven years in a classroom is not the best use of the time or money.
Michelle at January 20, 2013 8:50 AM
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