The GAO Just Told the IRS: Paid Tax Preparers Are Making Too Many Mistakes. Do Something.

The GAO Just Told the IRS: Paid Tax Preparers Are Making Too Many Mistakes. Do Something.

Over half of all Americans used a paid tax preparer last year. The GAO just confirmed what a lot of CPAs already know: a huge chunk of those preparers have no credentials, no oversight, and no accountability. And they're making mistakes that cost taxpayers real money.

Here's the problem. CPAs, enrolled agents, and tax attorneys are regulated. They have licensing requirements, continuing education, and can get kicked out of the profession. Everyone else? They bought software and hung a shingle. The IRS tried to fix this in 2012 with a mandatory competency test and CE requirements for unenrolled preparers. Federal courts killed it in 2013. So the IRS created a voluntary program called the Annual Filing Season Program. Voluntary. Predictably, the people causing the most problems don't participate.

The GAO found that unenrolled preparers make errors at a higher rate than taxpayers who just do their own returns. Think about that. You're worse off paying someone unqualified than doing it yourself.

What to do: this is a direct opening for CPAs. When a prospective client asks why they should pay more for a credentialed preparer, this is your answer. "Because unregulated preparers statistically make more errors than people who file their own returns. You're paying for accountability, not just paperwork."