I agree that even if we regulate unlicensed tax preparers, there will continue to be some unlicensed tax preparers who scam the public and commit tax fraud.

But that holds true for any law or regulation the government passes. To wit,

1. We have laws that make rape illegal, yet we still have rapists; and

2. We have laws that make drug trafficking illegal, yet we still have drug traffickers.

You seem to be engaging in “all or nothing” thinking here i.e. if regulating tax preparers doesn’t eliminate all unscrupulous tax preparation it is a waste of time and money.

I disagree.

The regulation of tax preparers will deter some would be tax preparation crooks from activating their crookedness and it will deter some would be incompetent tax preparers from entering the field in the first place.

In effect, regulation constructs a barrier to entry. The only people it will block are the lazy, the inept and the crooked.

If done correctly and efficiently, the good guys will not mind the regulation understanding that it elevates the reputation of the entire profession.

The goal of regulation, like that of any law, is not complete elimination of bad conduct, but a reduction of that conduct.

Yeah. The possibility of spending life in prison for gaming the tax system isn’t enough — we need to make her sign papers saying she wouldn’t do so, first! It’s almost certain that the false sense of security created by this kind of regulation would outweigh whatever deterrent value is has. Just look at financial markets — all the big frauds (Enron, Madoff, Worldcom, etc.) were under the SEC’s purview. No unregulated fraud gets big enough to fail like that, because people are smart enough to assess the frauds.