Tax Lawyer's Blog

“Every absurdity has a champion to defend it.”

 - Oliver Goldsmith -

When the only competitive advantage a tax preparer thinks he has over his competition is that he is cheaper, he’s in deep guano right from the starting block.

Yet, amazingly, some tax preparers believe price is the most important factor taxpayers should consider before hiring a tax preparer.

Unfortunately, tax preparers who think this, by virtue of thinking it, reveal their incompetence:

• Major Premise: Only tax preparers who think of tax return services as a commodity will see price as the most important consideration in choosing a tax preparer.
• Minor Premise: Only mediocre preparers are capable of thinking that tax preparation services are a commodity.
• Conclusion: Tax preparers who think price is the most important consideration, are mediocre preparers.

Average Tax Preparation Fees

Back in June of 2009 William Perez cited a study done by the National Society of Accountants that determined the average tax return price of various tax preparers:

Average Prices for Tax Preparation Fees

It’s a bit easier to find average prices for tax preparation services. The National Society of Accountants in their fee study reports the following average prices charged by their members:

• Average for 1040 with Schedule A and state return: $205
• Average for 1040 with state return: $115
• Average hourly rate: $122.12

Average Prices at Franchised Tax Offices

• H&R Block: $187.17 per return (average, 2009 data) 
• Jackson Hewitt: $188.96 per return (average, 2008 data)

Although I am no fan of the large tax preparation chains, I am committed to the truth. And the truth is that the tax prep fees at H&R Block and Jackson Hewitt are actually less than the national average.

Naturally, those unlicensed preparers whose only selling point is that they are cheap are bound to be threatened by the results of this study. Some will even play the ostrich and pretend the study doesn’t exist. But pretending doesn’t make it so.

And to consistently accuse CPA tax preparers of cheating their customers¹ when you know that the fees they charge are reasonable, is unethical, immoral and probably illegal.

But more than anything it’s evidence of envy, defensiveness and an apparent lack of self-confidence.

The Unlicensed Preparer and Fear of Competition

I do understand how preparers lacking an externally provable competitive advantage might feel tempted to accuse those possessing such advantage of cheating their customers. But it’s only the temptation I understand, not the succumbing to it. The former is human nature. The latter weakness of character. Strong people acknowledge reality then change it, if they can, or accept it, if  they can’t.

Henry David Thoreau said it best:

Shall a man go and hang himself because he belongs to the race of pygmies, and not be the biggest pygmy that he can?

It would be a great contribution to evolution if we could get people to redirect the energy they put into slandering others into improving themselves.

Hope springs eternal.

Price, Quality and Absurd Assumptions

I do believe there is a correlation between price and quality, but I am not naive enough to suggest that the size of the tax preparation fee and the quality of the tax preparation services are directly proportional. On the other hand, I should be counted among the ranks of the miltantly moronic were I to make the opposite assumption: That the size of the fee and the quality of the service are inversely proportional.

The first assumption is merely unwise. The second, dumber than a beer helmet.

But some folks never dissapppoint.

Listen to what unenrolled preparer Robert Flach, who claims to be cheaper than his more “initialed” competition, has to say about the relationship between tax preparation fees and the quality of tax preparation services:

I do believe that having initials after one’s name causes such a person to charge twice as much for half the service.

That is so off-the-charts illogical I feel compelled to syllogize it for you:

• Major Premise: The greater the qualifications a tax preparer has, the more he will charge.
• Minor Premise: The more the tax preparer charges, the worse he will perform.
• Conclusion: Hire the tax preparer with the fewest qualifications.

Chew on that gem of logic for a moment.

Now, would you ever dream of allowing someone capable of such blatant monkeyshine to get anywhere within two area codes of your tax return? 

I’d spoon with a leper first.

Footnotes:

¹  When a man is accused of intentionally overcharging his clients, he is accused of being a thief. Mr. Flach regularly accuses CPAs and attorneys of overcharging their tax clients and persuading them to buy services (incorporations, for example) they don’t need. As you might have noticed, self-serving, mean-spirited slanders such as these shan’t go unchallenged on this man’s blog.

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