Don't pay someone to make mistakes

[taxxcpa]

I just wonder what my error rate was

what the error rate would be if 10 EA's and 10 CPA's where furnished the same info you used to prepare the above return.

I may have done a few things wrong myself, but each item is something that most of us can probably handle, but when you put them all together there is a lot of opportunity to miss something.
The IRS could also miss something. I paid most of my estimated tax online, but mailed a final payment after Jan 15 using a 1040ES. Once before the IRS counted a similar payment as applying to the following year. Fortunately they corrected it after I called them, asking "where's my refund?}"

[RLymanC]

I Wonder

I just recently replaced a missing screw on my dishwasher. I could have hired a professional who would have had a better screwdriver and maybe a better screw.

There is a lot of difference between preparing a 1040EZ and a return with business, rent, taxable social security, IRA withdrawals, seller-financed mortgage income, dividends, interest, long and short-term capital gains, investment interest expense, office in home and unallowed passive loss on rental property. I had all that on my own return, and I would not advise Joe Sixpack, who might know how to replace the screw in my dishwasher, to try handling that on his tax return.

what the error rate would be if 10 EA's and 10 CPA's where furnished the same info you used to prepare the above return.

[JohnH]

Internet & the media

One of the reasons print journalism is in so much trouble relates back to the fatal problem the internet has created for traditional newspapers. Circulation is the key to profits in the newspaper business. But people turn to the internet more & more for their news, so subscription rates are falling through the floor, which lowers their circulation numbers, which has a negative impact on their ad rates. Advertisers know this so they put more pressure on the newspapers to give them special deals, which depresses profits even more. Lower profits mean less money to spend on journalism because they are having to focus on increasing revenue in order to keep the doors open.

The newspaper business is in a death spiral, and this is only the tip of the iceberg for most print media. Since all the media use the same sources for most of their info, the spillover effect is impacting all journalism. Sensationalism is the only thing they have left, and it's cheaper to produce than hard news & real analysis.

[taxxcpa]

I didn't need a professional to replace missing screw

That is not how the article comes across. It generalizes all of us paid preparers. And although you can replace the screw, it might take a professional to figure out which screw to replace!

I just recently replaced a missing screw on my dishwasher. I could have hired a professional who would have had a better screwdriver and maybe a better screw.

There is a lot of difference between preparing a 1040EZ and a return with business, rent, taxable social security, IRA withdrawals, seller-financed mortgage income, dividends, interest, long and short-term capital gains, investment interest expense, office in home and unallowed passive loss on rental property. I had all that on my own return, and I would not advise Joe Sixpack, who might know how to replace the screw in my dishwasher, to try handling that on his tax return.

[BHoffman]

Journalism in America - RIP

The author is a writer and her job is to sell magazines. Her article was meant to be provocative and eye catching. No one cares about substance anymore, just impact.

What passes for "news" today is ridiculous. We are not informed. We are entertained. CNN, Fox, MSNBC - they are all reality entertainment shows. Journalism is dead in America.

[WhiteOleander]

Perhaps we should invite her to spend a day with us doing these "easy" tax returns.

I agree that someone with a couple of W-2's and nothing else might not need me. But add in something that seems simple and it can grow complicted fast. And I include preparing a Sch A in that. It can grow complicated because they may not be able to deduct all of their mortgage interest. Or they may have investment interest. The list goes on. Nothing is easy.

Put a return with a couple of 1099C's in front of her and ask her to complete that return correctly. We are seeing more and more of COD eaxh year. Or, perhaps someone has a really bad year in business and has a huge NOL. Ask her to prepare that return correctly.

This woman is just showing her own ignorance. Maybe if we educate her, she will see?

[JohnH]

Let's make it more realistic

Make it more realistic.
Post the return on Apr 13 and then bug everybody to get it done on time.

[BOB W]

Maybe after tax season TTB could make up a complex tax return and post the info so that the board members could complete the return and post the answer(s).

The page by page results could then be reviewed. TTB's answer doesn't have to be correct, as complex returns can vary. It should be interesting and informative to all.

In the end, the board members can vote on the most correct answer after all the reviews are done.

[veritas]

I reviewed a "basic" return

done by a paid prepaprer for 2006.

On Sch A under misc deductions not subject to 2% limitations was,

Home Improvements $2,000

[David1980]

I wouldn't be shocked if 53% of returns prepared by a paid preparer had errors.

Like taxxcpa said, there's a lot of "fly-by-night RAL-pushing" prepares.

Preparing tax returns for money is one thing that almost anyone can do. No bachelor's degree, no license, no exams, no tests required.

I imagine if you looked at the numbers and didn't include those returns but only included what most of us would consider "legitimate" prepares the error rates are much lower. Or look at returns prepared by EA's only, or CPA's only, etc...

If a customer of mine was fooled by those things I'd tell him exactly that too. *Anyone* can be a paid prepare and most do not have the knowledge or the will to do it correctly. Then mention whatever qualifications you have that justifies the price.

[Bees Knees]

If a client asks me about that article, I’ll say this:

“I don’t know if the article is true when it says 53% of returns done by paid preparers have mistakes, but I do know this… Whenever someone new comes to see me who self-prepared their return the previous year, I find mistakes on over 90% of those returns.”

If they ask for a discount, I’ll say this:

“Out of the thousands of returns I’ve done since I started back in the early 80’s, I haven’t run out of fingers yet counting up my errors. I think my prices are too low with that kind of record. What do you thing?”

[gkaiseril]

According to Fox and Friends tax preparation is easy and you can do it yourself. 53% of tax preparers make mistakes on your paid return and only 47% of those who do it on the "computer" make errors.

Where did this come from? The IRS for all returns. What type of errors? What preparers?

If 47% of the computer prepared returns have errors, how good are the computers and the programs? I would demand my money back for a computer or program that was that bad. Even the pentium floating chip error was not that bad.

What is the error rate on e-Filed returns? Most prefessional preparers e-File and their rate must be lower?

[QUOTE=Another tip - work on your preparer, there is no reason they need to charge so much to do such an easy task - ask for a discount![/QUOTE]

Many preparets earn their income in 3.5 months and pay rent for 12 months. Further there are federal regulations about how one can charge for a return either flat fee or by the form, schedule or entry or an hourly rate.

[newbie]

I don't think the preparers who make all those mistakes are people like those on this message board.

But if I only need to replace a screw, I don't need a professional to do it.

That is not how the article comes across. It generalizes all of us paid preparers. And although you can replace the screw, it might take a professional to figure out which screw to replace!

[taxxcpa]

Tax preparer errors

I don't think the preparers who make all those mistakes are people like those on this message board.

There are a lot of fly-by-night RAL-pushing preparers who probably do make a lot of errors. Some have never prepared a return before taking a one or two hour training course. If the preparer also sells pornography, fake ID cards and runs a check cashing service--he might make errors on 70%-90% of the returns he prepares.

Also, there are a lot of people who have only a Form 1040, some interest income, mortgage interest and real estate tax to enter in a do-it-yourself tax program. These people probably are the main ones who prepare their own returns accurately. The kind of people who need professional help and try to do it themselves probobly make a very high number of mistakes--just as I would if I tried to repair my own car or install a central air conditioning system. But if I only need to replace a screw, I don't need a professional to do it.

[mblatour]

I read that article in both Money and Smart Money magazine...

and I was so irritated by it. It did a real number bashing tax preparers. "Top 10 things Tax Preparers Don't Tell You". It made it sound like people are better off doing their own taxes because we charge too much and make more mistakes than the average Joe. It also said something about CPA's charging upwards of 10 times more than H&R's rates. Now that I find to be very "pinnochio". What a load of crap.