Tuesday, January 19, 2010


A multi-initialed blogger (who shall remain nameless so as not to provide undue attention) responds to my annual “Don’t Assume” post by suggesting the reason why CPAs and attorneys charge more than their “unenrolled” brethren for preparing 1040s –

Here are some overhead items that most CPA and tax attorney preparers have that unenrolled preparers generally do not have:

• Sophisticated tax preparation software, updated for the latest tax law changes
• A quality tax law library either on CD, through an Internet service, or in hard copy
• Malpractice insurance (if your tax preparer makes a mistake, you can recover the costs of that mistake through an insurance claim)
• Fellow tax preparer employees to review all tax returns before they are filed (lack of secondary review is a major contributor to the filing of incorrect returns)
• Extensive continuing tax and professional education

My answer to this nonsense is, of course, “poppycock”. Actually I had another word in mind, but want to remain civil.

I know many, many non-CPA and non-attorney tax preparers, both EAs and the “unenrolled”, who have, if not all, most of the above items. The most important of these items is, of course, the last – extensive continuing tax and professional education.

Just a note – my experience with the then “Big 8” accounting firm, as discussed in my post, clearly indicates that item #4 does not always work. As I pointed out, a simple error on a state tax return was missed by a multitude of CPAs.

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