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Tax Preparers: Are All of Them Well Qualified?

Over a few years, the research was conducted with the purpose of evaluating qualification of tax preparers in this country. People were randomly sent to tax preparation offices to have their tax return filed. The article ‘Your tax preparers might not know what they’re doing’ reports:

For several years, researchers have been sending people into tax preparation offices to test the quality of the work. The results have been scary:

A tax preparer in North Carolina wasn’t sure what to do with one client’s dividend income form. She decided to just ignore it.

At a major tax prep chain in Florida, “the preparer seemed to want to help me with owing less, but was unsure how to go about it,” a client told researchers. The preparer tried clicking and unclicking various fields on her computer, explaining that “sometimes it made customers owe less.”

An independent preparer deducted car expenses from a return. The client didn’t own a car.

A New Mexico tax preparer asked plenty of questions, but then forgot to list her client’s daughter as a dependent-even though the daughter attended the tax session.

A second New Mexico preparer had to ask a supervisor how to round a number to the nearest whole dollar.

The reason of poor performance of some of the tax preparers is named as lack of standards for tax preparer’s education and training. Strict requirements on proper training of tax preparers are important. But there is no way each tax preparer may study 2,700 page tax code and 70,000 page compilation of court decisions. May be the right thing to do is simplify the tax code. If the tax code is transparent and easy to understand, then the individuals will handle most of their tax returns themselves. The need for tax preparers will drop significantly, and licensed CPAs will handle the most difficult cases.

The claim that a tax preparer is saving your money by maximizing your return is mathematically wrong. Tax preparers do not create money for you. The money is yours from the start. The tax preparers take a fee to dig your money out of a pile of rubbish, determining which part of your earnings belong to you by filling out a bunch of complicated forms. The work is so complicated that it is well worth the fee, but it is not economically productive, it doesn’t create wealth. Tax preparer’s fee may be considered as an additional tax. More simple tax code would mean simpler forms, less confusion and more confidence on the part of the individuals, capable of filing the taxes without help of tax preparers.

 

See also:

Why Can’t We Simplify Our Tax System? It Turns Out, We Can.

Lots Of Candidates Want To Simplify Tax Code; Here’s What They Get Wrong (I don’t personally agree with all statements in this article, but it still makes a good reading. Anyway, meaningful simplification of the tax code is only a theoretical possibility, that is unlikely to see implemented in the foreseeable future.)