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The Horse Act of 1884

The IRS may or may not have the authority it is claiming. But since Congress has chosen to create a Frankenstein's monster of a tax code, people unsurprisingly choose to pay others to deal with the complexity. there is high level of dishonesty and incompetence, not to mention outright fraud, among these paid preparers. What has happened for years is the paid preparer files tax returns with all kinds of illegitimate credits and deductions and takes a cut of the big refund. The taxpayer has no idea what the tax return says because no normal person can understand it. Two years later, the IRS lowers the boom on all the ignorant taxpayers who long ago spent their refund checks and have no ability to pay the back taxes, interest, and penalties. Meanwhile the preparer has skipped town and is also judgment proof.

I am sympathetic to the libertarian argument against excessive protectionist licensing regimes. In this case something needs to be done to protect the public and the fisc. Like you I think the ultimate answer is a greatly simplified tax code, but that seems about as likely as "Jeff [Redacted] 2013-14 ACC Coach of the Year" so in the interim, hard to blame the IRS for trying to do something to ameliorate the problem.
 
Seems to me this is a reach. Tax preparers are not working for the government, they are working for the individual. They are not the intermediary. It is the IRS' job to determine the validity of a tax preparer. Sounds like the IRS wants the individual to pay to do the IRS' job. If you cant control the tax code, the solution is to simplify it, not require other people to do your job.
 
Wrangor said:
Seems to me this is a reach. Tax preparers are not working for the government, they are working for the individual. They are not the intermediary. It is the IRS' job to determine the validity of a tax preparer. Sounds like the IRS wants the individual to pay to do the IRS' job. If you cant control the tax code, the solution is to simplify it, not require other people to do your job.
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you have it exactly backwards. The IRS is determining the validity of the preparer by requiring them to pass an exam. The preparer community is fighting back because they don't want to be regulated.
 
A decision from the judges is still months away. In oral arguments, the judges — all appointed by Republican presidents — gave no clear sign of how they will rule, yea or neigh.
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ha.
 
Deacon923 said:
you have it exactly backwards. The IRS is determining the validity of the preparer by requiring them to pass an exam. The preparer community is fighting back because they don't want to be regulated.
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This will be the end of tax preparation. The government will simply be ruining yet another economic sector which includes many small businesses by licensing. No other profession requires licensing by the government to ensure consumer protection other than doctors, dentists, hair stylists, librarians, accountants, lawyers, commercial drivers, educators, engineers, electricians, pest control techs, etc, etc. It'll be pandemonium.
 
For the vast majority of people, tax returns just aren't that complicated.

I wonder about people who have business activities that would necessitate a complex tax return and yet would have no understanding of it.
 
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Deacon923 said:
you have it exactly backwards. The IRS is determining the validity of the preparer by requiring them to pass an exam. The preparer community is fighting back because they don't want to be regulated.
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But what is the point of determining the validity of the preparer other than to make sure they do their job correctly? That is the point right? And if tax preparers are doign their job correctly there is really no need for the IRS to be checking up on them. It sounds great, but I doubt we reduce our IRS workforce if this goes into place. Instead we regulate the private sector and have less work for the pencil pushers.

If this was combined with a reduction in the IRS workforce I think it would make a lot of sense.
 
Takes me 15-20 mins to do my taxes online. So I don't really GAF either way, but trying to use The Horse Act of 1884 as legal precedent for this is just pathetic.

How about you just fix your tax. Eliminate all loopholes and make everyone pay a progressive income tax rate.

BOOM, done.
 
Wrangor said:
But what is the point of determining the validity of the preparer other than to make sure they do their job correctly? That is the point right? And if tax preparers are doign their job correctly there is really no need for the IRS to be checking up on them. It sounds great, but I doubt we reduce our IRS workforce if this goes into place. Instead we regulate the private sector and have less work for the pencil pushers.

If this was combined with a reduction in the IRS workforce I think it would make a lot of sense.
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That's the entire purpose of regulating preparers. To make sure they have the professional competence to do their jobs correctly.

But relying on this legislation to do so seems a big stretch.
 
Wrangor said:
But what is the point of determining the validity of the preparer other than to make sure they do their job correctly? That is the point right? And if tax preparers are doign their job correctly there is really no need for the IRS to be checking up on them. It sounds great, but I doubt we reduce our IRS workforce if this goes into place. Instead we regulate the private sector and have less work for the pencil pushers.

If this was combined with a reduction in the IRS workforce I think it would make a lot of sense.
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The point is not to make the IRS' job easier. The point is to ferret out and stop abusive tax preparers before they harm their clients and the Treasury. The IRS workforce doesn't need to be reduced, if anything it needs to be increased and improved as the agents are decreasing in quality and it takes forever to get an audit done. Again, I am certainly in favor of a simplified tax code to solve a lot of these problems, but effin Congress can't even decide whether or not to default on our national debt. The IRS cannot be expected to just throw its hands up and do nothing about this problem while it waits for Congress to suddenly wake up, kick all the loophole lobbyists out, and reform the tax code.
 
We certainly need a simplified tax code. Don't think I can agree that we need more IRS agents.
 
Wrangor said:
We certainly need a simplified tax code. Don't think I can agree that we need more IRS agents.
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Wait til you get audited and it takes a couple years to resolve due to shortage of appeals officers, or worse, you get an incompetent agent and appeals officer and then have to sue in tax court. All at your expense, of course, the government doesn't have to pay your legal fees if you win. Then get back to me.
 
Wrangor said:
We certainly need a simplified tax code. Don't think I can agree that we need more IRS agents.
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You obviously don't deal with the IRS on a regular basis. We got a letter initiating an audit on a 2010 gift tax return in February of 2012. We have agreed to extend the statute of limitations twice and are still stuck at the audit level. I just want to get to appeals. We have an estate tax audit that was initiated in January 2012 and the agent is so covered up he told us we probably won't hear back on our last settlement offer until after the new year. I also have multiple tax-exempt organization applications that have been pending for over a year. We need more IRS agents, and as 923 said, we need more of them who are actually competent. We almost always have to go up to appeals before we get an agent that is smart enough to even understand the arguments we are making and sometimes not even then. Having to go to the expense of filing a tax court petition to get a relatively routine audit settled is ridiculous, but we've had to do it multiple time in the past couple of years. Rant over :willynilly:
 
Surprisingly, underpaying and mindlessly cutting the numbers of government employees does not lead to an efficiently run government that serves the people, it leads to an inefficiently run government that harms the people.

ETA: just to beat a dead horse, naturally we could greatly reduce the size of the IRS with a more sane taxation system. But slashing and underpaying IRS agents while keeping the same incredibly complex tax system in place (and in fact, adding more and more loopholes and exceptions to exceptions to exceptions every year) is completely illogical. Unless of course the desired goal is to handicap and cripple legitimate government functions and then demagogue about how the government doesn't work well.
 
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Which is exactly what Wrangor is doing.
 
The only place I have suggested cutting IRS workers is if we enacted a more efficient system. I never suggested cutting IRS with no efficiency increase or code simplification.

Read PH. It helps.
 
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PhDeac said:
Which is exactly what Wrangor is doing.
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Wrangor said:
The only place I have suggested cutting IRS workers is if we enacted a more efficient system. I never suggested cutting IRS with no efficiency increase or code simplification.
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Well, to be fair to Wrangor, all he said was that he doesn't think we need more. I was just educating him that EVERYONE in the tax advocacy community agrees the agency is seriously understaffed.
 
I spent an hour on hold on the phone regarding income tax returns for a trust. Get through to the woman and explain that the accountant filed one form when he should have filed another.

She explained to me that she was only able to discuss one form as she was not trained on the other and didn't know what it was. So then I got to wait on hold for another 45 minutes so I could talk to somebody trained on the other form.
 
Wrangor said:
We certainly need a simplified tax code. Don't think I can agree that we need more IRS agents.
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I read it. I just didn't imply one was conditional upon the other.
 
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