Some Tax Preparers Don't Add Up- tax time warning

[WhiteTara]

http://www.washingtonpost.com/wp-dyn/content/article/2006/04/04/AR2006040401863.html
Test of Commercial Firms Finds Errors in 19 of 19 Returns

By Albert B. Crenshaw
Washington Post Staff Writer
Wednesday, April 5, 2006; Page D02

Commercial tax preparers made errors, sometimes amounting to more than $1,000 in incorrect refunds and overpayments, in 100 percent of returns brought to them by a government agency seeking to test the accuracy of work done by large chain tax-preparation firms.

The study by the Government Accountability Office was small -- only 19 returns, which the GAO cautioned cannot be used to generalize to the entire commercial return-preparation industry -- but on only two returns did the preparer produce what the agency determined was the right amount. And even those two had mistakes, though they did not affect the final tax amount.
snip
The preparers were not identified. They were described as outlets "of several commercial chain preparers scattered throughout a metropolitan area." All the preparers in the study were what the Internal Revenue Service calls "unenrolled preparers" who have not passed an examination or worked for the IRS. There are 300,000 to 600,000 such preparers. More than half of the 130 million returns filed each year are done by paid preparers, and in most states anyone can go into that business without special training or a license.

The GAO noted that several hundred thousand certified public accountants and lawyers are authorized to practice before the IRS and that another group of about 41,000, known as enrolled agents, must pass an examination or have worked for the IRS.

[ThoughtCriminal]

1. I caught a big goof this year

Tax preparer told me I would get back a big refund (My quick and dirty estimate was that I would owe a bit). So I asked: "Did you include Self-Employment tax?". Oops - no. My estimate was right on target

[fasttense]

2. So is the IRS going to audit all these individuals who used

these preparers? Seems to be the logical next step.

[WhiteTara]

3. more like "buyer beware"

I think. It would be impossible to go after all the H&R Block people. In some cases a tax program would be at least as good as the tax person who is crappy. I am so lucky, we have a wonderful CPA who is IRS agent certified who charges a really fair price.

[Cleita]

4. Something my tax preparer doesn't know.

I do it myself first and then I let her prepare my tax return to verify my figures. She has caught me making mistakes and I her, which I kind of gently ask her a pertinent question so that she goes back over it and always finds the error then.

Two heads are better than one. Also, you are fully invested in your own taxes. Your tax preparer is doing a tax marathon at this time of year with many clients, so it's a good idea to verify their work.