Horsing Around With Tax Preparers

Column by Emmett Harris.

Exclusive to STR

The Obama administration is filled with dreadful little sycophants who manely specialize in finding rationalizations for regulatory overreach. Because of this, when an opportunity to saddle the populous with a more burdensome government comes along, we would never expect them to look a gift horse in the mouth. Their latest chestnut, however, is about a nose further than normal. This time, they're mounting their latest power grab by using a Reconstruction-era law, the passage of which even the oldest and grayest of mares wasn't around to witness. They're expanding their regulatory kingdom for a horse . . . the Horse Act of 1884, to be precise.

Gilbert Rothenberg whinnys and snorts his way around the Justice Department's Tax Division. While few outside of the Paddock on the Potomac would deem him worthy of a sugar cube, in and around the Capitol, he's treated like a horse of a different color. For Rothenberg is tasked with convincing a three-judge panel that the Internal Revenue Service should be allowed to corral the entire tax preparation industry and, despite the neigh-sayers, the Tax Division lawyer and his herd of legal jockeys are chomping at the bit to do it.

When asked about why the IRS would stirrup a nearly 130-year-old law, Rothenberg demurred, saying he didn't want to beat a dead horse. Yet, he still didn't bridle at gleefully pummeling the figurative beast. He's pushing to give the IRS the ability to nag countless tax preparers, and he'll harness whatever means he can to see it happen.

Following the War Between the States, claimants could receive compensation for dead or missing horses as a result of the war. The law's consequence, which shocked no one outside of the halls of Congress, was to swell the numbers of supposed equine casualties to levels that would make Elmer blush. To counteract the potential for exaggerated claims, the government began to certify (regulate) “enrolled agents” to represent claimants seeking reimbursement. It's doubtful this eliminated fraud, but it would have concentrated the foal-based fouls into fewer hands. Hey, as far as the government is concerned, that's like ending up in the winner's circle. Purebred intentions; underbred results.

Returning to the present, though the Horse Act may be long in the tooth, or in this case long in the face, it hasn't been put out to pasture. Thus, it is technically still there to be used by Rothenberg and other beltway bots.

Dan Alban of the Institute for Justice thankfully is digging in his spurs to fight against Rothenberg and the IRS. “Congress never gave the IRS authority to regulate tax preparers,” said Alban. “Preparing a tax return is not a representative act.” He's correct, of course, but this is one time we'll take taxation without representation (if we must).

There may be another aim to the regulatory roundup. Since all preparers would essentially be considered enrolled agents, there would be less room for non-enrolled agent preparers to undercut the cost of their federally tamed equivalents. The result would be fewer preparers and higher prices. One can almost picture tack room deals made in a whorlwind of repressive pageantry.

Trotting out an arcane, yet somehow still-in-force law to make geldings of an entire, $9 billion industry is not simply horsing around. It is part of a pattern of abuse designed to groom us all for heavier hitching. It's a trend that begs to be bucked.

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Emmett Harris's picture
Columns on STR: 14

Emmett Harris lives in New Hampshire, home of the Free State Project.


John deLaubenfels's picture


Suverans2's picture

Of course, "manely", he was after all just "Horsing Around", so we need to get off our "high horse". lol

Tony Pivetta's picture

Populous? You mean populace? Or is that word play on the horse theme, too? Palomino?

Jim Davies's picture

More puns per square centimeter than any I've seen on STR. Well done - Pulitzer stuff!

Emmett Harris's picture

Puns from the obscure to the blatant.  :)