Internal Revenue Service regulators decided not to ask the Supreme Court to allow them to use the Horse Act of 1884 as a justification for regulating small-business tax preparers, a tacit admission of defeat after two lower courts said the agency exceeded its authority.
In a gift to large tax preparing companies, IRS officials wanted to force independent tax preparers to go through an expensive licensing process. They cited an old statute pertaining to compensation for horses killed during the -- wait for it -- Civil War as a legal basis for the rule.
"The case is over," Dan Alban of the Institute for Justice, which challenged the regulation on behalf of three tax-preparers, told the Washington Examiner. "The IRS is permanently enjoined from enforcing those licensing regulations."
The victory had already been won in two federal courts, but it was ratified when the IRS failed to ask the Supreme Court to review an appellate court ruling that had invalidated the licensing rules.
“These regulations were classic economic protectionism,” IJ senior attorney Scott Bullock said in announcing IRS's failure to appeal the decision. “The burden would have fallen on small entrepreneurs and consumers, while powerful industry insiders stood to reap the benefits of decreased competition. Instead, taxpayers will enjoy lower prices for tax-preparation services as more preparers compete for their business.”