Tax prep panic: IRS over-regulation.

• Author: Mangu-Ward, Katherine
• Position: Citings - Brief article

As W2S and 1099s started rolling in, mom-and-pop tax preparers around the country were stuck in limbo, thanks to new rules issued by the Internal Revenue Service.

The rules, which took effect at the beginning of 2013, required small-rime tax prepares to pay annual fees, take IRS exams, and complete 15 hours of continuing education classes. If the courses were taken through the IRS Nationwide Tax Forums, the price tag for compliance totals about $1,000. Attorneys and certified public accountants were exempt from the requirements. Big tax firms such as H&R Block actually backed the new rules, which would have put many of their seasonal competitors out of business.

In March 2011, the Institute for Justice, a libertarian public interest law firm, challenged the regulations in federal court on behalf of several tax prepares, arguing that rules weren't authorized by Congress and prevented citizens from exercising their economic rights.

And a couple of weeks after the rules kicked in this January, U.S. District Court...