New Bill Would Give IRS Power Over Independent Tax Preparers

A bill introduced by two House Republicans earlier this month would force tax preparers to undergo continuous training and pass costly, restrictive licensing exams. According to a report from The Daily Signal, Reps. Diane Black and Pat Meehan presented the bill as a way to fight tax fraud and other criminal activity.

“They can’t hire that many agents, but they can create an army of crony, private, un-deputized agents who will tacitly aid the IRS’ in their goal of maximizing revenue.”

Everyone who prepares taxes for money is already required to file ACCURATE returns, to the best of their ability. Cheating to get clients is a good way to go to jail. If the IRS has reason to believe a tax preparer is filing fraudulent returns, the tax preparer had better get ready for jail or huge fines.

An education requirement will not prevent fraud, except for training in fraud detection. The Earned Income Tax Credit is a huge area of fraud, and the IRS has rules on “due diligence” on it. Tax identity fraud is another growing area, and training on detecting it might help a little.

Part of the problem with the income tax is that the government defines almost everything as income. If it was a “Wage and Interest Tax”, pretty much everyone could do their own for free - and do it accurately.

But politicians have turned it into income redistribution, and defined income as pretty much anything that might increase your net worth. So there are subsidies for child care built into the tax code. Obamacare payments and fines are built into it. If you sell land, the profit is income. There are rules for depreciation. Rent a room of your house out? That is income, and you can depreciate some things but not others. Sell stuff on ebay? Income. And hobby income is treated differently than business income, although no one can say for certain which is which. If in doubt, the courts (which are funded by government) always interpret the law to increase government income.

A consumption tax would be much fairer and much healthier for the economy, but government will NEVER give up the power to control via taxes. Taxes are not about funding government. They are about controlling people.

“So, money. That’s why they did it.”

Do you realize an incompetent tax preparer can cost their clients a fortune?

Have you ever volunteered to help people with their taxes, and seen what they do when using computer software? I’ve seen people who failed to deduct alimony from their income. I’ve seen people who did not deduct interest paid on student loans. I’ve seen people who have rented out a house for years and never reported their income from it or took any deductions or depreciation on it.

Remember, those big companies (TurboTax, H&R Block and others) also help lower income (below $62,000/year) people use their filing software for free:

https://www.irs.gov/uac/Free-File:-Do-Your-Federal-Taxes-for-Free

But if you volunteer to help people on their taxes, you will also realize many people should NOT do their own. Not on paper. Not with software. People often pay more tax than they owe, because the law and IRS rulings are just so darn complex. And many states are worse.

Sell stuff on ebay? Income. And hobby income is treated differently than business income, although no one can say for certain which is which.

That is absolutely true, especially when there is a mixing of hobby and business income (as it is in my case). And "no one" INCLUDES the IRS!

And the government treats long-term investment income differently depending on whether it is derived from financial instruments (stocks, bonds) or "collectibles" (art, coins, antiques). That's infuriating.

Taxes are not about funding government. They are about controlling people.

Absolutely.

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