The Obama administration has been trying, for six years, to regulate tax preparation in such a way that would protect H&R Block and other big tax preparers from smaller competitors. After failing in court, the administration has gotten two Democratic Senators to propose an H&R Block protection law.
Here’s the background:
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In 2009, the Obama administration appointed Mark Ernst, the former CEO of H&R Block, to a top position in the IRS so that Ernst could write regulations on tax preparers. (This didn’t violate Obama’s conflicts of interest laws because the administration counted Ernst as a “career” hire and not an “appointee,” thus excluding him from coverage under the rules.)
Ernst’s rules required annual fees and testing for tax preparers. These rules would help H&R Block, one stock market analyst concluded at the time, because they would “add barriers to entry (or continuation) for small preparers.”
The problem: The Treasury Department (parent of the IRS) doesn’t have legal authority to create regulations on tax preparers. So the Institute for Justice helped some part-time tax preparers sue in federal court. H&R Block and Intuit (maker of TurboTax) came to the defense of the regulations in court.
The small guys won, defeating the Big Business-Big Government axis.
So the administration and the big companies asked Congress to give Treasury the authority to create the H&R Block protection measures. This year, Senators Ron Wyden and Ben Cardin introduced a bill to grant Treasury the authority it pretended it had back in 2009.
Once again, regulation is the means big companies use to kill competition and deprive consumers of choice.
