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Most paid tax preparers err in calculating refunds, GAO audit finds

April 09, 2014|By Shan Li
  • An audit by the Government Accountability Office found that 17 of 19 randomly selected professional tax preparers calculated the wrong refund amounts for their clients. Above, a federal tax table.
An audit by the Government Accountability Office found that 17 of 19 randomly… (Daniel Acker / Bloomberg )

As the deadline for tax season nears, a study shows that many tax preparers are prone to errors when preparing returns for their clients.

The Government Accountability Office released the report this week based on visits to 19 randomly selected tax preparers.

Of the 19 tax professionals visited, 17 calculated the wrong refund amount, the GAO said. One gave a customer $52 less than the proper refund, for example, while another over-calculated the amount by $3,718.

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A dozen of the tax preparers failed to report certain income such as cash tips, while three claimed a child as a dependent who was ineligible.

The accountability office said its study was in line with data from the Internal Revenue Service showing that both tax preparers and individuals made many mistakes in filling out their tax forms.

"Tax returns prepared by preparers had a higher estimated percent of errors -- 60% -- than self-prepared returns -- 50%," the report said. "Errors refer to changes either to the tax due or refund amount."

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Although the sample size was small, the errors found probably resemble those in millions of tax returns prepared by tax professionals each year.

"The IRS has long recognized that preparers' actions have an enormous effect on its ability to administer tax laws effectively and collect revenue that funds the government," the report said.


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Twitter: @ShanLi

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