Government institutions frequently overstep their bounds, hindering ordinary citizens from making a living. Recently, the Internal Revenue Service (IRS) has begun hindering independent tax preparers.
The IRS is demanding individual tax preparers to pass a new special licensing exam, pay additional fees, and attend annual educational courses. Individuals who have prepared taxes for 20 or more years must now comply with these new regulations or close up shop.
The IRS is placing an unnecessary squeeze on entrepreneurs who simply offer tax services to their local communities. There are several unintended consequences to this situation, including the following:
- The new requirements have costs that preparers will pass on to consumers.
- Many preparers will stop providing tax services, and prices will rise as fewer options will be available.
- The IRS will discourage future entrepreneurs from going into the business of tax preparation.
Who benefits from the IRS’s demands? Larger tax corporations such as H&R Block because the IRS will eliminate their small business competition. However, there shouldn’t be government-controlled monopolies of service industries, especially if we want to have a free-market system.
The Institute for Justice is suing the IRS, arguing that “Congress never gave the IRS the authority to license tax preparers, and the IRS can’t give itself that power.” See the following video for more information: