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Money Magazine's test reveals huge tax preparation discrepancies.

Money Magazine's Tax Test reveals an average discrepancy of over 300% in the amount that tax preparers state is due.

Since 1987, Money magazine has conducted a total of eight "tax tests" for the purpose of testing the knowledge and ability of tax preparers across the country. The test involved sending a financial profile of a hypothetical family to an average of 50 seasoned tax professionals, who agreed to use the data to complete the family`s tax return and then be judged by Money. The tax issues presented on the tests were fairly standard, and in the course of a filing season, the tax pros were bound to encounter most, if not all of them.

The table below tabulates the tax test results for all 8 years that the test was conducted:

Year of Tax Test Range of Tax Preparers' Stated Amount of Tax Due % Difference in Stated Amount Range of Tax Preparers' Fees
1987 $7,202 - $11,881 165% $187 - $2,500
1988 $12,539 - $35,813 286% $250 - $2,200
1989 $9,806 - $21,216 216% $271 - $4,000
1990 $6,807 - $73,247 1076% $375 - $3,160
1991 $16,219 - $46,564 287% $520 - $4,500
1992 $31,846 - $74,450 234% $375 - $3,600
1996 $36,322 - $94,438 260% $300 - $4,950
1997 $34,240 - $68,912 201% not available

Overall Result: There is an average discrepancy of over 300% in what these tax preparers state is due.

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