Comments on: Unenrolled Preparers Not so Good, TIGTA Study Reveals

By: Peter

Peter — Sun, 06 Mar 2011 14:13:08 +0000

Ami,

Designations do not guarantee you will get compentence, integrity or honesty, but rather that the chances of getting those things is greater than if you had hired someone without the designation. And, if you don’t get competence, integrity and honesty, you can do something about it by filing a complaint with the regulatory authorities or making a claim against the preparer’s malpractice carrier.

By: ami

ami — Sun, 06 Mar 2011 04:50:18 +0000

Let’s just call a spade a spade….EA, CPA, JD….all of these are just indications that someone has passed an exam of some sort. Ultimately they are really no measure of anyone’s knowledge. Tax preparation unfortunately is largely “learn as you go” and it is no surprise that “35%” of unenrolled preparers file inaccurate returns. With the IRS continually “simplifying” the tax code, things are bound to happen. I am working for a great firm this season but with ALL the complications ranging from enormous returns, unbearably unwieldy software, office procedures and IRS expectations…it’s no small wonder that there is this kind of error rate. I also do clients at home and am in the process of studying for the EA exam (no small feat) and the reason people like “unenrolled preparers who charge less” is because for them it is not worthwhile to spend $200 to file a 1040EZ or 1040A. Can’t blame ‘em. Our expenses are not THEIR problem. How are you going to pretend you put all that much time and effort into a return when you know you only entered three numbers! And define “not so good” when discussing unenrolled preparers….CPAs, EAs, JDs….hmmm…..no mistakes eh? Look….today I incorrectly double-entered a couple of charitable donations. I know why I did it. The client submitted materials in a hodgepodge fashion! Another great way to increase preparer error rate. If the “35%” number can be believed, then I think it’s an IRS expectation problem…..not a negligence/fraud issue or a my-initials-are-better-than-your-initials issue.

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By: AspiringCPA

AspiringCPA — Tue, 26 Jan 2010 20:34:52 +0000

The idea that unenrolled tax preparers are the ones actually touching your return at a CPA firm is also deceptive Bruce: 2 CPAs then review the return where I work. Also, don’t forget the important fact that the unenrolled preparer is not legally able to practice before the IRS (represent you in tax court or discuss your return with the IRS). If the CPA does something wrong…he can fix it for you. With the unenrolled preparer, you will have to seek proper representation, concede to the IRS, or represent yourself (any of these seem to defeat the purpose of hiring someone in the first place).

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By: Peter

Peter — Mon, 06 Jul 2009 19:36:44 +0000

Bruce, You said,

"Hummm, if I read this correctly, this kinda blows a therory of yours. The person who paid $74 had an accurate return, The person who paid $200, well, did he get what he paid for?"

Goodness, gracious. I didn't suggest and the Hite and TIGTA studies don't assert that all returns that cost more are more accurate than all returns that cost less. This is about statistical probablities, not absolutes. I am sure I can find an instance where someone got his tax return prepared free of charge and it contained no errors. Likewise, I can find a case where someone got his tax return prepared for $1,000 and it was riddled with errors. The single incident standing alone means nothing when it comes to statistical probabilities. That's why the TIGTA study examined 28 returns and not just 1 return. Also, you say this "kinda a blows a theory of yours." Well, given the myriad studies that have shown that unenrolled preparers make substantially more errors than CPA preparers, I don't think it's theory at all. It's a living, breathing reality. One, I am afraid, some folks just cannot accept.

By: Bruce

Bruce — Mon, 06 Jul 2009 18:24:12 +0000

“The fees ranged from $74 to $271. Paying more did not guarantee a more accurate return: Three preparers who charged $74, $150 and $271, respectively, provided correct returns, while the others contained errors.
One practitioner who charged $200 prepared a return that was “willfully or recklessly” prepared, according to the report.”

Hummm
If I read this correctly, this kinda blows a therory of yours.
The person who paid $74 had an accurate return, The person who paid $200, well, did he get what he paid for?

By: Bruce

Bruce — Mon, 06 Jul 2009 18:19:24 +0000

Here is a point made in the above mentioned study that you didn’t mention to the rest of your readers:

“Given the study’s small sample size, the findings cannot be generalized to all paid preparers.”

Correct me please if I am wrong, isn’t that what you are doing, generalizing the finds to all paid preparers?

By: Bruce

Bruce — Mon, 06 Jul 2009 17:53:05 +0000

Mary,

The cost I am told is less than that of one with professional licese.
My agent tells me this so I can only take is word for it.

By: Mary

Mary — Mon, 06 Jul 2009 17:48:40 +0000

That’s an interesting point about malpractice insurance.

It would be interesting to see if it’s even possible for an unenrolled preparer to purchase malpractice insurance.

If unenrolled preparers can purchase such insurance, it would be interesting to compare the rates they are charged compared to the rates charged to preparers who hold some form of professional license.

By: Bruce

Bruce — Mon, 06 Jul 2009 17:33:46 +0000

Not fighting anything.

Please point me, and the rest of us, to the TIGTA study over CPAs. Where is it?

I for one would love to read it, and quote it.