Tax service H&R Block contributed thousands of dollars to two lawmakers pushing a bill that could put the company’s competitors out of business, according to information uncovered Sunday by The Daily Caller News Foundation
Republican Representatives Diane Black and Pat Meehan introduced a bill Dec. 1 designed to put costly regulatory burdens on tax accountants wanting to help others with their tax returns. The two lawmakers received $3,500 from H&R Block before introducing their bill and even more afterwards, sources revealed to TheDCNF.
“An estimated 80 million Americans turn to tax preparers to assist in filing their yearly returns,” Black said in a statement Dec. 1. “Today, however, there are no minimum standards to stipulate who can charge for these services. This lack of accountability puts Americans at unnecessary risk and contributes to rampant improper payments within the tax system.”
Jonathan Frank, communications director for the congresswoman, dismissed the accusations as false. He notes her district and other rural regions don’t see a lot of companies like H&R Block, leaving residents few options for where they can get tax help. The lack of choice puts them at risk of using questionable services that may put their personal information at risk.
“Already in our state, we have seen fraudulent tax preparers make up charitable contributions, create false dependents, and even file bogus returns for illegal immigrants,” Frank told The DCNF. “And that’s just in middle Tennessee over the last eighteen months. Clearly, standards are needed to protect consumers and hold bad actors accountable.”
H&R Block gave Black and Meehan an additional $11,000 immediately after they introduced their bill. The bill would require tax accountants to undergo costly examinations and classes on an annual basis and to submit to background checks. The bill has since received criticism for being disproportionately harmful to smaller tax accountants.
“Big companies like H&R Block can easily absorb the additional costs imposed by new regulations,” The Institute for Justice noted. “Independent tax preparers–who often work seasonally and part-time–may be pushed out of business by these additional expenses.”
The Internal Revenue Service tried to impose similar regulations back in 2012. H&R Block at the time hailed the proposed regulations because it meant fewer competitors that may not have the same standards. The proposed regulations failed to survive a lawsuit but a bill like the one proposed by Black and Meehan would change that.
“It’s not a ‘costly regulatory burden’ to require paid tax preparers who have access to Americans most personal information to undergo a criminal background check and have a professional credential,” Frank added. “Congressman Black didn’t introduce this bill for a campaign contribution and certainly not for the approval of a Washington D.C. law firm, she did it because it is the right thing to do.”
The bill has yet to be brought up for a vote. H&R Block and Meehan did not respond to requests for comment by TheDCNF.
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