The Government’s Tax Racket Grows New Tentacles

Monday, January 4, 2010
Posted in category Tax Tyranny

The large special interests have won again, and you folks all lose. Do you think it is pricey, now, to have your taxes prepared at a place like H&R Block or Jackson Hewitt, or even the smaller Mom-and-Pop tax prep shops? Special interests who stand to profit from this new and corrupt scheme have convinced your government to regulate tax preparation companies and paid tax preparers. Tax preparers will  now have to meet new federal standards for “quality.”

Under the new rules, employees of chain tax-preparation firms including H&R Block Inc. and Jackson Hewitt Tax Service Inc. will be required to pay a registration fee to the IRS, pass a “competency” exam and have 15 hours of education a year. Previously these employees weren’t required to meet federal standards.

The requirements also will apply to hundreds of thousands of independent preparers and mom-and-pop storefronts that offer tax preparation as one of several services. About 60% of U.S. taxpayers use tax preparers, according to the IRS. That number includes certified public accountants, or CPAs, who are already subject to professional standards and aren’t covered by the new rules.

…starting in 2011, all paid tax preparers will have to register with the IRS and include a unique identification number on any returns they prepare. Preparers will be given three years to pass a competency exam in either individual or small-business taxation.

Kathryn Fulton, a senior vice president for government relations at H&R Block, said “we welcome the move.” Of course they do. H&R can afford to cover the costs and/or pass them on to customers. Additionally, a loophole for H&R may be available because its paid preparers work under supervisors, and thus those preparers may not be subject to the regulation. So that could be a major price advantage for them, driving up their competitors’ costs/prices relative to their own. I’m sure H&R’s ‘VP for government relations’ is hard at work on making a slick deal for the big tax firm. This reminds me of executives at the quasi-governmental corporate state giant, General Electric, who said about Sarbanes-Oxley: “We welcome the move.” Indeed, because they knew Sarbanes-Oxley would hinder and cripple smaller firms much more so than ginormous firms like GE.

Intuit, the maker of Turbo Tax, also lobbied hard for the regulations so the company can drive business its way. I have a little tidbit for readers: Mark Ernst resigned as CEO of H&R Block in 2007, and where did he land? He is a Deputy Commissioner at the IRS.

I found this quote quite remarkable, coming from an enrolled agent who sees “unregulated” tax preparers as being bad for his business (because they offer competition at lower prices): “We want to make this into a profession, not just a part-time thing you set up on the kitchen table for six weeks during the tax season.” Let’s see, the tax season is about three months long, and that means? Most paid preparers are part-time for that very reason. Many are homemakers who only want to work for part of the year, and many, like some of my non-CPA, business colleagues, do tax work to supplement their income. Many of these folks will be driven from their part-time jobs.

I’ll leave you with a comment from a WSJ reader: “How about fixing the tax code so we don’t need tax preparers?” Easy answer. Because government works to empower large, wealthy special interest groups and enables them to profit handsomely from its massive web of taxes, codes, and regulations that enslave powerless American citizens within the omnipotent corporatist state.

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4 Responses to The Government’s Tax Racket Grows New Tentacles

  1. Tom Osborne says:

    January 4th, 2010 at 10:40 pm

    I recognize this kind of thing. This is pretty much the way Notary Publics are treated, at least in California. Your commission is only good for a certain number of years and then you have to start all over again with the courses, examinations, criminal record check, photograph, bond filing, oath of office, buying a new seal, and errors and omissions insurance. This whole things costs about $500 each time, and that is for a “career” that pays at the rate of $10 per notarization, or pays nothing at all for someone like me who volunteered to become a notary for the company I work for. Very little pay, but you still have all the potential unlimited liabilities (lawsuits, penalties, jail time). The thing is, every time I go through this, I think, “They don’t re-bar-exam test LAWYERS, do they?” No, they don’t. But they DO shoot horses, don’t they?

  2. cousin lucky says:

    January 5th, 2010 at 12:30 am

    Years ago when the I.R.S. wanted to know why I failed to file tax returns; I told them that I was too dumb to figure out how to do them and too poor and skeptical to trust anyone to do it right. In their minds I fit the ” profile ” so they have left me alone for the past twenty-years or so!! You Betcha!!!

  3. MoT says:

    January 5th, 2010 at 1:09 pm

    It’s all part of the pigeon-holing of every profession or occupation on the planet. The ultimate goal for pencil pushing busy bodies with nothing better to do with their wretched lives. Best to find someplace quiet and far far away from the maddening crowd if you can. This is one reason I’m doing my damn level best to exit the IT field all together. They’re never satisfied and constantly looking for another income stream with which to rape you further. All, of course, to polish their own resume and pad their accounts with a straight snake-oil salesman grin on their faces.

  4. liberranter says:

    January 6th, 2010 at 11:49 am

    I recently asked my father, a practicing CPA of nearly sixty years, how in the world he possibly makes sense of, much less keeps up with, all of the various tax laws and federal administrative regulations surrounding his profession.

    His reply? “I’ve taken over 500 calendar hours of continuing professional education training this last year alone, four and a half times the amount I’ve taken in any previous year, and I STILL can’t make sense of most of the new laws and regulations, and neither can anyone else in the business whom I know.”

    Remember THAT statement next time you get a notice of an IRS audit. Your tax preparer, an “expert” in the field, can’t even comprehend the pseudo-legal, contradictory, and untenable tax code (imagine trying to survive in a society with a legal code that changes every year), a fact that won’t relieve YOU, the taxpayer, of the responsibility and attendant penalties for filing an incorrect return.

    God help us, or let Him give us the fortitude to stand up and put an end to this nonsense SOON and once and for all!

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