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Tax preparers girding for ‘crunch time’

More people using paid tax services as April 17 deadline nears, experts say

Friday, April 7, 2006

Click here to enlarge this photo Brian Lewis⁄The Gazette Dawn Bluett is in her first year as a tax preparer in a Gaithersburg office of H&R Block.

‘‘But tax season’s not over yet,” Bluett said last week. April 17 is this year’s filing deadline, because April 15 is a Saturday. It’s also the day Bluett’s seasonal job as a rookie tax professional will end.

‘‘It’s been going pretty well,” said Bluett, 25, of Germantown. ‘‘It’s getting down to crunch time.”

With the deadline looming, and as filing has grown more complex with changes in tax laws, more people are opting to pay someone such as Bluett to figure their taxes rather than risk making errors and leave themselves vulnerable to penalties, according to experts and published reports.

Of about 130 million tax returns filed in 2004, 78 million were prepared with help from a professional, up from about 67 million in 1999, according to the Internal Revenue Service.

The boost in demand and the subsequent flowering of tax services has thus moved watchdog groups and others to remind consumers that, despite the security they may feel in paying an expert to do their numbers, taxpayers are ultimately responsible for — and punished for mistakes on — their returns.

‘‘If you follow poor advice and end up with unpaid taxes, you bear the consequences,” according to a February report by ConsumerReports.org, ‘‘which range from interest and penalties to imprisonment if you’re convicted of knowingly cheating the government.”

Which would seem to put great pressure on tax-preparers, of which there are many kinds, from acquaintances with no formal training to tax lawyers to people such as Bluett, who took a 66-hour training course through H&R Block last year.

Bluett generally handles between one and four returns a day, and while she has not yet confronted the scenario that most intimidates her — ‘‘just having a client who has a lot of stuff” — she says she’s not worried.

‘‘It is a lot of responsibility,” said Bluett, who has an associate degree’s in accounting from a college in Pennsylvania, where she is from originally. ‘‘But you know, ask questions. That’s what I’ve learned.”

The IRS, which licenses tax professionals known as ‘‘enrolled agents” — who, like certified public accountants and tax lawyers, can represent clients at IRS hearings — did not have data available on complaints it has received from taxpayers dissatisfied with tax services, according to Jim Dupree, an IRS spokesman.

In Maryland, about 66 percent of e-filed returns — which are expected to account for roughly 40 percent of all state returns this year — come from tax-preparers, according to Michael D. Golden, a spokesman for the Maryland Comptroller’s Office.

‘‘We seldom get complaints,” Golden said, adding that Maryland does not license tax professionals. ‘‘It’s really the responsibility of the taxpayer” to ensure returns are filed properly.

Only California and Oregon license businesses that do tax work, according to ConsumerReports.org.

Cindy Hockenberry, a tax information analyst with the National Association of Tax Professionals, isn’t sure most consumers appreciate that their returns are their responsibility, even when they pay to have them prepared.

‘‘I don’t think they do,” Hockenberry said. ‘‘They figure if they pay someone to do their tax returns, they have an out.”

Bluett says she feels her training, which began with a high school course in accounting, has prepared her for the job, and she’s planning to get a bachelor’s in accounting and possibly become a certified public accountant.

She says she’s not worried about the seasonal nature of the job because she also works full time as an accounts receivable coordinator for a Rockville firm.

She and her husband, Jonathan, made sure their taxes were done in early February, she said. She did them.