Tax Prep Is Dead!

For the past thirty or forty years, the tax preparation business has been one of steady growth, with low barriers to entry, with no educational or licensing requirements. And, in most locations, anyone with a business card and a computer could call themselves a tax preparer.
Because of these minimal requirement, consumers had no quality control over their tax preparation other than to judge it by the size and speed of the refund. This gave rise to fly-by-night tax preparation businesses, refund anticipation loans, and more. Every new franchise was going to be the one that turned out to be bigger than H&R Block.
You know what happened?
Taxpayers discovered that when a preparer made a mistake, the IRS didn't care whodunnit, the taxpayer had to bear the responsibility. Of course the taxpayer could try to sue the tax preparer, but fat chance of that succeeding if the fly-by-night operation had already folded up and moved their tent.
So, as these fly-by-night operators left taxpayers stuck with the bill, the IRS began to receive a lot of complaints. Especially from folks who had originally thought it really great to be getting that giant refund. At least until they discovered the refund they were expecting was the result of a fraudulent return by a preparer who was long gone from town, and they were stuck with penalties and interest and were facing the potential of being charged for submitting a fraudulent tax return.
Sounds like fun, huh?
Taxpayers also discovered that they could do their returns online, or with free software, get more of a refund, legally, and avoided a lot of the penalties that they got by using the unskilled fly-by-night preparation firms.
Pretty soon, even the half-way decent firms found they were losing clients as the convenience and cost savings afforded by the interweb kicked in.
And, even their old failsafe, the Refund Anticipation Loan (the RAL) got hit as the Office of the Comptroller of the Currency (the OCC) hit them by forcing lenders to abandon the RAL business. All of a sudden, a main revenue stream for all the big firms, like H&R Block, Jackson-Hewitt and Liberty Tax Service dried up... almost overnight they were out of the bank products business.
Oh, the best part is yet to come. The IRS has started formulating rules for licensing preparers. First barrier to entry in a profession that is being squeezed to death by technology, fraud and bad loans. What would you do if you were in the tax preparation business?
Well, first of all, you could look for a job.
But, if you're like most self-employed folks, it's pretty hard to go back to a job once you've tasted the freedom, and hopefully the income of self-employment.
Maybe there's another way.
Maybe you could look at the industry in a different light and start looking at tax services other than simple preparation. Services like cost segregation studies, tax problem resolution, or non-profit organization formation. Things that may not require licensing or credentialing, and that build on the knowledge you already have.