Obama & IRS Grab Power, Betting on 19th Century ‘Dead Horse’ Legislation

Alicé Leuchte | September 25, 2013

On the heels of the IRS scandals which revealed discriminatory abuses of authority, the Obama Administration has reached back into history to amass more power for the IRS.

Reuters has reported that the administration is using the Enabling Act of 1884 (also known as the “Horse Act”) to support new federal regulations for tax preparers, forcing the industry to comply with standardized competency testing and compulsory, continuing education classes.

After the Civil War, Congress passed a law allowing citizens to make claims for the value of their horses lost during the war.  The Enabling Act soon followed in response to erroneous claims with the Treasury Department.  This legislation gave the Secretary of the Treasury the power to “regulate the practice of representatives of persons before the Department of the Treasury” in order to increase accountability within the claim process.

129 years later, independent tax preparers are fighting this “dead horse” in court.  According to the Heritage Foundation, the court may likely find in favor of the tax preparers, and cites a compelling argument:

Dan Alban of the Institute for Justice argued on behalf of three independent tax preparers challenging the IRS’s authority to regulate their businesses. The IRS’s authority, he explained, was little different from a court’s authority to regulate the practice of the attorneys appearing before it…

If the administration’s horse wins this race, not only will the industry be hit with more expenses to meet the IRS requirements (further hindering employment), Americans will have another reason to shell over more money for tax day.