WASHINGTON D.C. – As millions of taxpayers turn to paid tax preparers to help complete what, for many, is their largest financial transaction of the year, a coalition of consumer advocates and community organizations is releasing the findings of the second national poll showing broad public support for new consumer protections designed to prevent errors and fraud during the tax preparation process.
The poll also found that 68 percent of respondents believe that either their state government and/or the federal government requires paid tax preparers to be licensed-when in fact only four states (California, Maryland, New York and Oregon[i]) require mandatory standards for paid tax preparers who are not already credentialed as enrolled agents, attorneys, or Certified Public Accountants.
This poll, like the previous poll results released in 2016, found that more than 4 out of 5 respondents believe that paid tax preparers should be required to pass a competency test; be licensed by the state; and provide a clear, upfront list of fees before completing a taxpayer’s return.
“This second national poll commissioned by CFA not only shows that the public continues to support licensure and minimums standards for paid tax preparers, but also that 68 percent of respondents believe that licensure is already required,” said Michael Best, Senior Policy Advocate at the Consumer Federation of America. “The extensive use of paid preparers, the high instance of problems with paid preparers, the public support of, and the misperception of many that such protections already exist, means that the time has long passed for minimum standards in this industry.”
The poll found that:
1. Half of the public uses paid tax preparers from time to time and nearly a third uses them frequently. Forty-nine percent of those surveyed used a tax preparation company in the past five years, which is consistent with the GAO estimate that approximately 56 percent of individual tax returns were completed by a paid preparer in 2011.
2. 68 percent of respondents believe that either state and/or federal government requires licensing for paid preparers while only 20% believed that neither require licensing. In fact only four states have mandatory standards for unenrolled paid preparers.
3. 86 percent of the public supports requiring paid tax preparers to pass a test administered by government that would ensure that paid preparers have the knowledge and training to complete taxpayer returns correctly.
4. 88 percent of the public supports licensing requirements for paid tax preparers by a state agency that would also accept and resolve complaints, and enforce consumer protections.
5. 88 percent of respondents support requiring paid preparers to supply an upfront list of fees. Tax preparation is a rare industry where prices are often not given up front before the work is completed.
6. 59 percent believe paid preparers should have special training but don’t need a degree and 31 percent of the public believe that paid tax preparers should have a college degree in accounting.
The complete results of the poll are available here.
The poll was commissioned by Consumer Federation of America in response to concerns about frequent errors and fraud by paid tax preparers that are used by millions of Americans.
“These poll results are similar to findings from our 2016 study of paid tax preparation services in southwest Atlanta. In our survey of consumers, we found that most did not know their most recent tax preparer was not licensed by the State of Georgia,” said Beth Stephens, Sr. Director of Public Policy and Advocacy with Georgia Watch. “This report further demonstrates the need for legislation that provides transparency and protections for consumers.”
The Consumer Federation of America is an association of more than 250 nonprofit consumer groups that was established in 1968 to advance the consumer interest through research, advocacy and education. www.consumerfed.org