Tax Filing Chains

Answer 1

I know it isn’t tax season, but this sort of thing is always on my mind. Do you file your own taxes or do you pay someone to do it for you? If you pay someone are they qualified and certified? It goes without saying that someone with credentials may have a bit more knowledge than any old person on the street. So look for those that are certified public Accountants (CPA) or enrolled agents (EA). Lately tax preparation has become a big business within the U.S. So much so that chains of tax preparation firms have sprung up all over the place. I’ve even seen some of these offices employing game day mascots to jump up and down in front of their storefront to get people to come in and file with them.Seriously, can you picture a CPA doing that? No? For good reason; true professionals don’t have to act like used car salesmen trying anything to get you behind the wheel of your brand new 1040. With this recent strain of tax-season only tax preparation stations, the government has taken steps to investigate how accurate they really are. In a 2006 investigation performed by the Government Accountability Office it was determined that 42% of tax returns tested had significant errors resulting in plus or minus $1,500. (Granted the sample size was very small, only 19 tax returns. So, I hope someone in the government who knows something about statistical sampling looked at this study.) Also, disturbing was that tax preparers intentionally omitted income information even when supplied by the taxpayer. And they have an incentive to do so. Many of these tax prep chains have a policy of trying to get you the lowest amount of tax liability and/or the highest amount of a refund as they can. They even advertise that they’ll save you more money than their competitors. A claim that can only reliable be done on a regular basis if they bend or break the rules a little. Remember, if a mistake is made on your tax return, even if it is made by a tax preparer you paid, you are liable for it. So think twice before going to a chain to prepare your tax return. Stick to a professional or do it yourself.