GAO Studies

Not too long ago, I signed up with the US General Accounting Office (GAO) to be notified of newly issued reports related to taxes.  Every week or so, I receive an email alerting me to what has recently been released, along with link to the actual report, in pdf format.  There were a couple of new reports that I downloaded today that I found interesting

Vehicle Donations - This is a study of vehicle donation programs run by charities.  It describes their results from the perspective of both the charities (which normally only end up receiving a tiny percentage of the vehicle's perceived value) and the donors (who usually claim deductions of much more than the vehicles are really worth).  Neither result is a surprise, considering that professional fund raisers skim off most of the value of donations before passing on a small percentage to the actual charities; and the misconception that many people have that they can claim a tax deduction for full Kelly Blue Book value, when their jalopies could actually only be sold for much less.  I hear this one a lot from people.

Paid Tax Preparers - This is an interesting report on the GAO's survey of how satisfied clients are with the work of professional tax preparers.  In a style more typical of the media, they make a big deal about their conclusion that five percent (5%) of clients of tax pros are being poorly served.  Maybe it's the optimist in me; but I can't help but see that in a completely different light.  That means 95% of clients are being well served by their preparers.  That seems like a very impressive statistic; not something to get all panicky about.

I've taken the liberty of excerpting the following useful exhibit from the GAO's report: 

� When searching for a preparer, get recommendations from friends, co-workers, or other trusted people. Find out if you qualify for free services.

� Interview the preparer before hiring to check out qualifications, experience, discipline problems, and any history of complaints.

� Be sure you understand other services you will be getting, such as electronic filing or Refund Anticipation Loans. Find out whether these services are optional, what they will cost, and how they will benefit you.

� Don�t hire a preparer who guarantees a refund before seeing your tax documents or whose fee is a percentage of your refund.

� Make sure your preparer understands your personal circumstances, income, and expenses. Show your official tax documents to your preparer, including W-2s and 1099s.

� Review your completed return before you sign it. Check that your tax information is correct. Even though someone else completed it, you are responsible for the accuracy of every item on your return.

� Don�t sign a blank return and don�t sign in pencil.

� Make sure your preparer�s signature and tax identification number are on the return before you submit it. Keep a copy of the final return.

� Don�t make checks for taxes due payable to preparers. Checks should be made payable to the United States Treasury.

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/01/2003 05:05:00 PM Send this post: