Subsidize, then regulate....... the life blood of government.

Apparently, some tax preparers are upset that the feds are requiring licenses as a way to regulate the industry.

Congress never gave the IRS the authority to license tax preparers, and the IRS can’t give itself that power.

But 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.

Now most of you know that I am generally against regulation but how about one that work's for Old Gordon by creating barriers to entry into the market? With my CPA designation, I'm usually grandfathered into all these regulations.

Yet, I'm against these regulations. Why? because the industry doesn't need them.

I've been a CPA for 23 years. There was never an outcry for regulating the industry until the past few years. Anyone want to guess why?

With the expansion of the earned income credit, lot's of unscrupulous people got into the industry to extract large fees from lots of poor dumb asses. For instance, cruise into any bad neighborhood and you'll usually see a tax preparation business right next to the local pawn shop and/or check cashing business.

These people are willing to charge upwards of $500 for a tax return I would charge $95 for. Now you might be asking why customer would be willing to pay that. But if you are due a $7,000 refund for money that was never yours to begin with what do you care what the fee is?

And like all other types of "free" government money, the earned income credit invites all kinds of fraud into the process.

Hence the government now needs to regulate the people who are ripping off the system.

If the feds really wants to get rid of the riff raff in the tax preparation business, simply take the money out of it. The guys in the business will move to greener pastures like Medicare fraud.

More......