Public Turns to Professionals in Face of Tax Complexity More and more Americans are filing their taxes by turning to professionals, or computer software. That trend has many saying the tax code needs simplification.
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Public Turns to Professionals in Face of Tax Complexity

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Public Turns to Professionals in Face of Tax Complexity

Public Turns to Professionals in Face of Tax Complexity

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RENEE MONTAGNE, Host:

Time now for business news.

Today's the day, the deadline for most Americans to file their federal income taxes. A Monday holiday in six eastern states and Washington, D.C. allows those lucky residents an extra day, until tomorrow, meaning there's just enough time to get professional help for the growing number of taxpayers who are turning to professionals to do their returns.

NPR's Scott Horsley reports.

SCOTT HORSLEY: This H&R Block office in San Diego will be open until midnight tonight, serving last minute tax filers. Veteran tax preparer Roy Taramasco worked here all weekend, stopping only long enough to enjoy his mother's Easter dinner.

After today, Taramasco will go back to his regular job as a San Diego firefighter. He's just about out of H&R Block business cards, having prepared nearly 700 returns this year.

ROY TARAMASCO: I have a young lady who's an economist that comes and sees me. She runs a couple hundred million dollar funds, and I said, You could do this yourself. I don't want to deal with the tax laws. You know what you're doing. You can do it in one-quarter of the time that it takes me. I want you to do it. I said, Great, I'm happy to see you.

HORSLEY: According to the IRS, more than 60 percent of taxpayers now get professional help with their returns. That number has increased almost every year for the last two decades.

At the same time, do it yourself tax software is also selling rapidly. In January, H&R Block sued the maker of the most popular software, Turbo Tax, over one of its TV ads.

DENISE SPOSATO: They were claiming that they prepared more tax returns than H&R Block's 12,000 offices, when in reality they have no idea how many tax returns we prepare.

HORSLEY: Block's spokeswoman Denise Fasado says even Block itself doesn't track how many returns it prepares, instead counting clients. Turbo Tax dropped the claim in its TV ad, but later filed its own lawsuit, accusing Block of illegally copying one of its commercials.

The bitter battle shows how much is at stake in the lucrative tax preparation business, both for software makers and services like H&R Block.

IRS Commissioner Mark Everson says the number of people doing their own taxes with just a pencil and calculator is down to about one in five.

MARK EVERSON: The basic problem is that our tax code is too darn complicated. So more and more people feel they have to turn to a tax preparer to get help in terms of navigating the complex system.

HORSLEY: But Scott Hodge, who heads the Washington-based Tax Foundation, says even using a professional is no guarantee of getting one's taxes right. A spot check of chain tax preparers by the Government Accountability Office this year found mistakes made in every one of the 19 offices visited.

SCOTT HODGE: Even some of the most professional people out there, tax preparers, make mistakes. So I think it really argues for some major simplification, and I think Americans are ready for that.

HORSLEY: In fact, a survey by the Tax Foundation this year found 80 percent of Americans think the tax code is too complex. More people complained about the complexity of doing their taxes than about how much they had to pay.

But Hodge admits, there's no political interest in Washington in actually streamlining the tax code. And that means more willing customers for software like Turbo Tax and tax preparers like Taramasco, who's expecting a refund, by the way, on his own taxes.

TARAMASCO: I just got them done, as a matter of fact.

HORSLEY: Scott Horsley, NPR News, San Diego.

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