Tax Preparation

Haven't filed your tax return? You're not alone. Internal Revenue Service statistics indicate that more than one-third of individual taxpayers hadn't filed as of April 7 and might be waiting until the final days before Monday's deadline. (This year's deadline is extended two days because the 15th, today, is a Saturday.) If you're among the tax procrastinators, be careful. Last-minute filers are prone to errors that can be costly and can single out returns for audit.

Tax return preparers at commercial chains made mistakes on virtually every tax return prepared at the request of undercover congressional investigators, the auditors said Tuesday. In 19 visits, the Government Accountability Office asked for assistance from preparers to file returns for two hypothetical families. Only two of 19 tax returns showed the correct refund amount, but both of those returns included errors.

New York Atty. Gen. Eliot Spitzer sued H&R Block Co. on Wednesday, accusing the nation's largest tax preparer of steering clients into individual retirement accounts that Spitzer said "were virtually guaranteed to lose money" because of hidden fees and low returns. H&R Block has opened nearly 600,000 individual retirement accounts since 2001 for its tax customers.

One month after pledging to staunch the loss of customers from its digital tax business, H&R Block Inc. said Thursday that it had acquired a small, online tax service company whose founders helped create the popular Turbo Tax software. TaxNet Inc. of San Diego, formed last year by Tom Allanson and David Murray, launched its online tax preparation and filing program in January. Formerly with Intuit Inc.'

Alma Jean Batson, a San Bernardino tax preparer convicted of tax fraud last November, was found to have violated her parole and sentenced to 16 months in prison, state officials said. State tax officials found that Batson, 54, the owner and operator of two Inland Empire tax preparation agencies, had continued to operate her tax business, a violation of the terms of the probation. Batson had been sent to prison for 60 days after being found guilty of filing false reports on her own taxes.

Joseph Heidelman, an Upland-based accountant, figured the growth of tax-filing software threatened the ranks of tax preparers like him with a permanent deduction. So back in the 1980s he got out of the business. The programs for personal computers coming on the market back then were "designed to replace the tax preparer," Heidelman said, "and they do a good job."But not a perfect job.

Vince Dorn, a 46-year-old technical writer for Silicon Valley biotech companies, has filed his own tax returns for as long as he can remember. This year, he handed his Form 1040 to a professional. "We wanted to make sure we were getting all the tax breaks we could get," said Dorn, who recently launched a technical writing business. "We had all these things going on: kids headed to college, a new business, a new home, issues with retirement plans.

California's tax agency is moving forward with a revolutionary -- some say disturbing -- concept: having the government do your taxes for you. Instead of getting blank forms in the mail this month, a small group of taxpayers selected for a pilot program will receive a tax return that's already filled out. All they'll need to do is sign it, enclose a check if they owe anything, and send it back to the state.

As tax preparation season begins, military families, parents with kids in college and hybrid-car owners may find it worth their while to file early this year. The reason: Many of them will be eligible for bigger refunds. Employers are required to mail W-2 statements by today, clearing the way for Americans to complete their federal and state tax returns.