Complain about a product or service

GAO Finds Tax Preparers Prone to Error

April 5, 2006

Income Tax • IRS Faulted for Lax Identity Theft Protection Efforts • IRS Loses Nearly 500 Computers Over Three Years • GAO: IRS Still Not Doing Enough to Secure Data • Taxpayer Advocate Targets IRS Collection Policies • IRS Scales Back Outsourcing Plans • December is Tax-Prep Time • IRS Has Refunds for 95,746 "Missing" Taxpayers • GAO: IRS Needs More Oversight of Private Debt Collectors • IRS Gives Away Millions Due To Failed Software Upgrade • New IRS Online Payment System Raises Privacy Fears • Taxpayers Can Get an Automatic Six-Month Filing Extension • April 15th Should Be Just Another Day, Taxpayer Groups Argue • "Tax Freedom Day" Three Days Late This Year • Senators Push for Electronic Tax Filing • Paying Taxes With Your Credit Card Can Get Expensive • GAO Finds Tax Preparers Prone to Error • Consumer Group to Taxpayers: Don�t Borrow Your Own Money • States Oppose IRS Plan to Loosen Privacy Rules on Taxpayers' Returns • More ...

The U.S. Government Accountability Office warns that the people who get paid to prepare your taxes often make significant errors and underestimate the costs of doing returns. Members of Congress said it points up the need for some professional standards for the industry.

Even though the study was limited in scope, Senate Finance Committee Chairman Charles Grassley (R-IA) said it should cause concern. He said bad practices appear to be widespread company to company.

In the study, GAO investigators went underground, visiting tax preparers at 19 firms affiliated with commercial financial service chains, providing fictional tax scenarios. The investigators said when the returns were prepared, most of the time they were wrong. In some cases the refund was unjustified, in others the fictitious taxpayer overpaid.

Perhaps troubling to the Internal Revenue Service, the GAO report said most preparers did not report cash received from a business as income. More troubling for taxpayers, many overlooked common deductions, including tax breaks for education expenses.

The GAO also said consumers often had no idea beforehand what it would cost to have their taxes prepared. Some preparers, the investigators said, failed to provide a cost estimate, saying it would depend on what forms were used and how quickly the taxpayer wanted to receive a refund.

Report Your Experience
If you've had a bad experience -- or a good one -- with a consumer product or service, we'd like to hear about it. All complaints are reviewed by class action attorneys and are considered for publication on our site. Knowledge is power! Help spread the word. File your consumer report now.

Back to the top |