. >> reporter: john gambino, in hoboken, new jersey, who does taxes for many of his clients, would haven subject to the new test and education requirements. he was a plaintiff in a federal lawsuit brought by a libertarian public interest law firm. the suit challenged the irs' authority to impose what is called a tax preparer licensing scheme. and in january of 2013, a federal district court judge sided with gambino and halted the irs' program. ruling the agency lacked statutory authority. this past february, a federal appeals court agreed, leaving the new regulations dead. but despite the legal victory, gambino remains concerned about the potential for regulation, which he believes would be anti-competitive and increase costs for consumers. >> right now, they're free to choose. i have nothing against cpas or attorneys who practice tax prep. i think right now consumers are free to go see these people if they prefer that. but they also -- lots and lots of them prefer to use preparers like myself who are not licensed, because they think they're getting good value for the services that we p

people who were previously happy customers of someone like elmer killian or john gambino would have topnd someone else to prepare their taxes, and in some cases, folks might decide, no, i'm not going to decide someone to do, it i'm going to give it a go on my own. and in some cases, those folks may be less prepared, less qualified to prepare taxes than whoever it is that was preparing them before. you also have the problem where, you know, there has been fairly vigorous competition in the tax preparation market, but when you put in the barriers to entry, it makes it very difficult for people to come in and compete with h&r block. of course, another organization that lobbied for these regulations was infewity, the makers of turbo tax. they stand to benefit the most from these regulations because the regulations don't even apply to tax software. of course, turbo tax benefits the most from these regulations because not only does it impose a cost on all of their competitors, but imposes no cost on them. the final reason that these regulations would be very bad public policy is because they