With the tax code 1.5 million words long and growing, over 60% of the 140 million tax filers paid someone else to fill out their returns this year. Yet in most of the country, anyone can rent a storefront, hang out a shingle and be in the tax business. The IRS doesn't require paid preparers to meet any education standards. This is long overdue, in most states you need a license to cut someone's hair.
Senate Finance Committee Chairman Max Baucus, D-Mont., and Sen. Charles Grassley, R-Iowa, noted that back in 2006 they'd held hearings on the problem--after GAO employees, posing as taxpayers, visited 19 outlets of commercial chain preparers and found 17 made substantive mistakes that affected the refund amount. During hearings in 2009, the nation's two largest tax preparation chains, H&R Block and Jackson Hewitt Tax Service Inc. , both endorsed regulation and testing of tax preparers.