Posted by The Editorial Board
May 21, 2009
If some storefront shop flubs your tax return next year, don’t blame the Alabama Senate.
Early in this year’s legislative session, state senators passed a bill, 25-0, that would help ensure Alabamians get competent and honest service when they pay someone to prepare their tax returns.
The legislation died because it couldn’t get a vote in the House of Representatives–because some windbag lawmakers threatened a filibuster. Blame them.
The opponents included Democrats and Republicans who were clearly under the sway of commercial tax preparers. “Eighty to 90 percent of the people who do this are providing a good service,” said state Rep. Craig Ford, D-Gadsden. “It puts them out of business.”
Which is baloney.
Those who provide good service had nothing to fear from this legislation, which would have established a state board to test and license those in the income tax business who aren’t otherwise regulated as, say, accountants or lawyers.
The people whose livelihoods might have been at risk–that is, people who could not pass the test or who have been benefiting from predatory practices– hardly merit the protection of our lawmakers.
The tax-preparer bill was the brainchild of ImpactAlabama, a nonprofit group that offers free tax services to low-income families. The group began pushing for the law after its volunteers went undercover and discovered widespread problems with errors, fraud and fees in the commercial tax-preparation industry.
The implications of their findings were frightening, especially for poorer Alabamians who overwhelmingly rely on unregulated, seasonal shops to prepare their tax returns. A big trouble spot was tax preparers’ handling of the Earned Income Tax Credit.
Had House members passed Impact Alabama’s bill, those tax preparers would be required to get tested before offering their services to the public, they’d be required to get updated training each year, and they’d be required, as well, to fully disclose the details about their lucrative, auxiliary services like refund-anticipation loans.
But, no.
Alabamians will go into next year’s tax season with the same protection they had this year. Which means, for the poorest and most vulnerable Alabamians, almost no protection at all. They have the House of Representatives to thank.
