TAX PROFESSIONAL VS. TAX SOFTWARE: IN THIS CORNER…

By: Kerry Freeman EA Tax Planning 1 Follower


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News Release                  

For Immediate Release                                  Contact: Kerry Freeman, EA

January 22, 2008                                            (623) 518-2157

                                                                        KerryFreeman@sbcglobal.net

                                                                        Anthem, AZ 85086

________________________________________________________________________

 

 

TAX PROFESSIONAL VS. TAX SOFTWARE: IN THIS CORNER…

 

Unless you’re a tax professional yourself, you probably need help preparing your return. More

than half of all U.S. taxpayers use a paid preparer to complete their returns; of the rest, many

use tax preparation software. Both have advantages, but software can come up short in a few

key areas.

 

Consumer Reports: recently staged a contest of usability and accuracy between the two leading

tax software packages. Employing profiles of four hypothetical families endowed with typical

taxpayer issues, a Consumer Reports Money Adviser staffer entered the information into each of

the software programs and evaluated each for ease of use. An Enrolled Agent evaluated the

accuracy of the resulting tax forms; EAs are federally licensed tax practitioners specializing in tax

planning, preparation, and representation. According to Consumer Reports, “neither [software

product] was perfect when it came to more complicated tax situations.” Even “minor”

imperfections in a tax return could cost you money in missed deductions or unused credits, or

could trigger an audit.

 

And what happens if you end up being audited? Only an Enrolled Agent, certified public

accountant or attorney can represent a taxpayer before all administrative levels of the IRS for

appeals, audits or collections. Most people feel better if they have a licensed preparer to

represent them. It’s also worth noting that in 2006, tax courts ruled against filers who tried to

blame erroneous returns on the software they used.

 

“You, the taxpayer, submit your own return, regardless of who prepares it,” advises Kerry Freeman,

 EA, Vice President of the Central Arizona Chapter of Enrolled Agents. “Whether it’s timely,

complete, and correct is ultimately your responsibility.” Mr. Freeman adds that in many cases,

it’s impossible to prepare a tax return so that it’s completely and unambiguously “correct.”

“Some financial magazines have had a contest every year among professional preparers to see

how many get a sample return right,” she says. “Then their headlines blast professionals: ‘24 out

of 25 tax professionals will make a mistake on your return!’ The point is, of course, that the

editors have picked a different set of ‘correct’ interpretations from the professionals, and the

professionals from each other. And the artificial data they supply ignores the issues of the

ambiguity of both some tax law and real-life clients’ data. That is why good tax pros and their

clients work together to choose the best and most accurate tax return for that particular client,

something tax software can’t do. If return preparation were unambiguous, no skill would be

needed to do one.”

 

If you need assistance finding a licensed tax preparer in your area, in Arizona visit www.CACEA.COM.

For more  information about Enrolled Agents visit the www.IRS.GOV or call Mr. Freeman at Freeman

Income Tax Service at 623-518-2157

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