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December 8, 2022

GAO Went Undercover to Discover Tax Preparers Are Terrible at Tax Preparing

Mind you, it was a small sample of 19 but of those, 17 were wrong:

GAO found significant preparer errors during undercover site visits to 19 randomly selected preparers — a sample which cannot be generalized. Refund errors in the site visits varied from giving the taxpayer $52 less to $3,718 more than the correct refund amount. Only 2 of 19 preparers calculated the correct refund amount.

The errors ranged from not reporting cash tips in 12 of the 19 returns to claiming an ineligible child for the Earned Income Tax Credit. The worst of these mistakes was failing to provide an accurate tax preparer number (that's the ONE number a tax preparer already has figured out before the adding of lines begins, ya know).

According to GAO analysis of the IRS' National Research Program database, paid tax preparers are worse at doing other people's taxes than taxpayers are at doing their own.

It may not be a coincidence that the GAO recommended to Congress that the IRS be granted the authority to regulate tax preparers once and for all. On the same day, new IRS Commish John Koskinen asked the Senate Finance Committee to hurry up and just make it happen:

The U.S. Internal Revenue Service asked Congress on Tuesday for legal authority to regulate thousands of unlicensed tax return preparers, but lawmakers were neutral on the idea.

"I will have to talk with my colleagues to see what's doable," said Senate Finance Committee Chairman Ron Wyden, a Democrat, after gaveling an end to a hearing on the issue.

That's Congressional Code for GFY but we shall see.

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