Our tax system has more costs than just what we pay the government. Tax preparation is a $7 Billion industry.
There are some reasons for that, other than how complex the returns sometimes get, since the vast majority are actually quite simple.
While some staters don't require their paid tax preparers to be licensed, a number do; this is actually a good thing, because those who don't require this have a number of fly-by-night operators who do a bad job and can't be found when the return gets audited. That's why Oregon switched to requiring licensing, and year round reliable contact addresses for paid preparers, and continuing education, etc.
The thing with Income Tax preperation as a business is this, it's seasonal. Yes, there is a trickle of work year round as people file late or revise returns, but even H&R Block and the other major chains drastically cut their staff back after the first of May. So, unless you have a steady source of income for the rest of the year, you have to make the majority of your income in a four month period.
Dad made a go of it since he had a small but steady accounting business year round, the office was in the home, and mom was well paid. That didn't really change all that much when mom went on disability. I worked with him for three years before going back to finish my college degrees, and it was definitely the income tax season that made it possible for me to get by, even though I lived with my parents. And we were _not_ charging the high rates; due to our ideological beliefs, we kept our fees rather below the market rate, so that retirees could afford us,a dn even then it was not unusual for us to discount our fees even further; hey, we'd just filled out their return, we _knew_ they couldn't afford our full fee!
But we kept 12-13 hour days for four months, seven days a week, and were turning away business. The rest of the year we were open tuesday through thursday. The largest fee I ever charged for a return was $450.00, and that return had Oregon part year, NY part year, NYC part year not matching the NY part year time period, and the federal return, including several differnt moves moving expenses. That was, of course, the one time I got stiffed by the client; we did not require payment prior to turning over the completed return, and he was the only one who took advantage of that to not pay. Everyone else paid us, eventually. But that $450.00 return would have cost him at least twice as much at H&R Block at that time, I'm pretty sure. Pre-Internet, you couldn't just download forms and instructions online, you had to order them in advance; the New York portions required me to contact the New York Dept. of Revenue and get them to mail me the neccessary forms and instructions.
I remember when IRS Form 1040-EZ first came out, we thought that would result in a change in who we had as clients as there were a number of our steady customers who qualified for that form. Nope, they were there right on schedule. The first year the Form 1040-EZ did not have a signature line for a paid preparer; the second year and ever after it did; I cannot for the life of me understand how someone who qualifies for the IRS Form 1040-EZ could need assistance filling it out, but we had a steady stream of 1040-EZ returns every year, and only charged a token fee, even lower than our previous lowest rate, because all it took was the time to fill out the form. I mean, Do you have any income other than W-2 income, and does your W-@ income exceed X dollars? Do you have interest income of more than $400.00? Do you have enough deductions to itemize? Do you qualify for any tax credits other than X? If you answer yes to any of these, you can't use the 1040-EZ, so all you do with the 1040-EZ is total the W-2 income, enter it in the proper line, enter any interest income in the proper line, total them, deduct the standard deduction based upon your filing status, look up the tax on the resulting number in the appropriate tax table, deduct any allowed tax credits, deduct the income tax witholding listed on the W-2, and voila! Your refund or tax due.
But we filled out a ton of those every year. The whole reason for the creation of the 1040-EZ was that these people shouldn't need to pay to have someone fill out their return for them if they qualified to use it, so they removed everything from the standard form 1040 that didn't pertain to make it idiotproof. While I believe most of those who qualified to use it did so on their own, a significant number still wanted someone else to fill it out, a large enough number that they added a paid preparer signature line after the first year.
Those 1040-EZs filled out by tax preparers are all returns that add into the listed cost of tax preperation for the year, that shouldn't have been there, except that some folks are so terrified of the forms, I guess, that even a 1040-EZ is something they can't handle.