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IRS Overreach

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The taxman puts his hands in our pockets. But it’s one thing to reach into our bank accounts and take our money, it is quite another when governments engage in different kind of overreach, where they go beyond the rule of law and just start pushing people around.

Take the case of Sabina Loving and Elmer Killian.

The Institute for Justice has.

These plaintiffs are suing the IRS because that bureau of plunderers has ruled that Ms. Loving and Mr. Killian — who provide tax preparation services — must be regulated and schooled and certified by the IRS itself. The IRS says that these independent tax preparers (independent in that they are not part of big businesses) can’t just offer their services on the market, they must undergo an expensive annual education and certification process.

The overreach part is that the IRS has no statutory authority to regulate these businesses. Congress rejected precisely such regulation back in 2008. So the clever kleptocrats now argue that a pre-IRS law hailing from way back in 1884 authorizes their regulatory powers.

But that law doesn’t even deal with representatives of folks who owe the government money. It deals with representatives of people owed money by the federal government.

Nice try.

“You will be as shocked as Captain Renault to learn that big tax-prep companies — H&R Block, Jackson Hewitt, Liberty — all support the new regulations,” writes A. Barton Hinkle in Reason magazine, “for the same reason big tobacco companies go after roll-your-own smoke shops: It’s in their interest to stifle low-cost competitors.”

Like Ms. Loving and Mr. Killian.

As we prepare our tax returns in the next several weeks leading up to April’s filing day, perhaps we should burn a little incense along with our midnight oil in support of the plaintiffs and the Institute for Justice. For, really, they are fighting for us, too — eternal vigilance and all.

This is Common Sense. I’m Paul Jacob.

8 replies on “IRS Overreach”

As usual Mr. Jacob, you are spot on.
What will be next? I will have to go through an “education and certification” process if I use a homemade Excel spreadsheet to do my taxes? Or my mother-in-laws? What if she gives me $25 for my troubles? Does that mean I am in “business” and must be “certified” by the government?

Not TERRIBLY unreasonable, although I recall a recent investigative survey where the people at the IRS who answer the phone for taxpayer questions were queried about details with regard to filling out a particular aspect of a normal return. And got it wrong most of the time. And the same questions by the mom and pop storefront preparers got it right most of the time. Not esoteric points. Just basic filing information.
So if the IRS is requiring certification for anyone that asists on tax preparation, perhaps they should start with the mass legion of folks that they hire on prior to tax season who are messing with us. I would think that all of those folks that get hired on every year should have to be recredentialed and certified as well. And perhaps all of the folks in all the office that adminsiter all this should have to get the same re-certification as well, since the tax laws seem to get morphed into new and exotic shapes every year.
And while they are at it, they could institute some IRS internal penalties for their workers that violate due process or engage in unconstitutional activites.
Maybe better that they spend a few dollars on that instead of just PR propaganda about how nice they are now.

On the wish list, perhaps a whistleblower reward for anyone from the IRS tattles on an IRS agent that advocates or rewards IRS employees based on how much money they collect, and that perpetrator would then lose their job.

I was only going to say how it’s interesting the way most laws that are passed these days, even down on the state level, work to the benefit of a special interest (usually a state-privileged corporation(s)) and to the detriment of the general interest… meaning to the direct harm of large numbers of specific individuals. Not the intention of the Constitution: http://blog.tenthamendmentcenter.com/2011/08/not-your-public-educations-general-welfare-clause/

Standard operating procedure for the oligopolistic regulatees to regulate out their new or smaller competitors but quite interesting that the IRS should be able to qualify the persons dealing with it.
Practitioner before the IRS should be responsible to their customers, not the Service. If they do not meet the standards of their customers they will be
out of business. If the IRS would publish a paid preparers report I would wager on Ms Lovng and Mr Killian before I would the preparer from a chain.

This IRS ruling put me out of the tax prep business. First, they wanted $65 for a PTIN and then they required continuing education. Since I only prepared a few returns I would have lost money if I had continued.

Fortunate for me it was more of a hobby than a business.

Just a way to put the little guy out of business. This is NOT a free country.

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