IRS Argues Your Tax Return is Just Like a Dead Horse

Normally this would be a good Friday story, but you can't always control when Washington is going to bring the crazy.

The Obama administration on Tuesday defended its effort to regulate the tax return preparation business for the first time in U.S. history, basing its case largely on a 19th century law dealing with horses lost or killed in the Civil War....

[the Obama Administration attorney] explained that the administration sees the "Horse Act of 1884" as providing ample authority for the U.S. Internal Revenue Service to regulate the tens of thousands of preparers who fill out millions of Americans' federal tax returns.

Here is the logic, such that it is

A post-war industry emerged of agents who would press war loss claims for a fee, usually a percentage of the claim collected. Soon, claim values were being fraudulently inflated.

In response, the government started regulating these intermediaries, barring unscrupulous ones and certifying honest ones as "enrolled agents," a title that is still used today by people who represent clients in matters before the IRS.

The IRS is arguing that tax return preparers represent their customers in much the same way that enrolled agents do, so the agency should be able to expand regulation to include preparers.

Note that tax preparers are not actually IRS enrolled agents, they just argue they are kind of sort of like them (in that they both deal with tax returns, I suppose).  But enrolled agents explicitly act as an intermediary between citizens and the government in disputes and claims.  This is not the role of tax preparers.  They merely charge a fee to fill out time-consuming and confusion paperwork.  My tax accountant has never once had any conversations with the IRS on my behalf, nor should he.  I would engage an attorney for that.


  1. Mole1:

    My tax return is just like a dead horse. No matter how much I beat it, it doesn't go any faster.

  2. Matthew Slyfield:

    "They merely charge a fee to fill out time-consuming and confusion paperwork."

    confusion -> confusing

  3. Matthew Slyfield:

    "Normally this would be a good Friday story, but you can't always control when Washington is going to bring the crazy."

    When is Washington not bringing the crazy?

  4. Rick Caird:

    This is another IRS mess. They should be embarrassed. The dead horse law was designed to control the people trying to file claims for dead and lost horses during the civil war. So, since th IRS did not come into existence until later, their regulation should be restricted to those taking a tax deduction for horses lost during the civil war. I am prety sure that would be an empty set.

  5. Incunabulum:

    But, right now, your accountant works for *you*. The IRS wishes to change that. Think of all the revenue the IRS can bring in if all the tax preparers are beholden to the IRS for their jobs. Think of all the social programs that could be funded to improve a child's life - why do you hate the children?

  6. Matthew Slyfield:

    No, your tax return is not a dead horse, it's a dead tree. :)

  7. jdgalt:

    Not all tax preparers are enrolled agents, but there are EAs out there, and if I were about to be audited I would probably hire one. They have to pass a difficult three-part exam on Federal tax law and a background check.

    Only a few EAs are allowed to represent taxpayers in tax court (it requires an additional credential) and you're probably right that an attorney is better. Only be sure your attorney knows tax law! The law has almost as many specialties as medicine these days.

    Oh, by the way Rick: yes, the IRS existed during the civil war; it was created along with the first federal income tax.

  8. Mark Alger:

    The whole Enrolled Agent thing strikes me as Yet Another instance of cronyism. Why do we need enrolled agents? Because the IRS over-reaches. Why does the IRS over-reach? Because they can. Why do we tolerate IRS over-reach and not slap the service down or eliminate it altogether? Because shut up.


  9. a_random_guy:

    I had to use an Enrolled Agent this year to fill out my tax return ("had" to - long story, but not really important here). I had to wonder: who is he loyal to, his client or the IRS? He earns good money by being able to say he is an enrolled agent; the IRS issues this qualification and can take it away if he doesn't act the way they think he should. Yet he is the one who would represent me to the IRS in case of a conflict. So...just where would his loyalties lie?

    I really hope I don't have to find out...

  10. marque2:

    You need to join the 1990's and start doing your returns electronically or at least an accountant that uses a computer. I could forward you links to Turbo Tax, TaxAct, etc if you like.

  11. marque2:

    Are you sure? I could argue either way.
    The paperwork may be confusing, but results in a state of confusion.
    So it is properly confusion paperwork!

  12. Matthew Slyfield:

    Even if you file electronically, I would be willing to bet that the IRS produces several paper copies.

  13. Matthew Slyfield:

    No, I am not sure. I am so confuse.

  14. marque2:

    Really? Maybe if the return was flagged by computers, but otherwise I would doubt it. Where would they put 150 million 20 page returns?

  15. Matthew Slyfield:

    I could suggest someplace for them to put them, but it wouldn't be polite.