Courtesy of NAEA – www.naea.org
A TIGTA audit, which hit email boxes in DC this week, makes for interesting reading. On the plus side, the new accuracy rate is far higher than the accuracy rate TIGTA measured during the 2011 filing season (39 percent). On the down side, half of returns in the study were incorrectly prepared.
Of the 39 tax returns prepared for TIGTA auditors, 19 (or 49 percent) were prepared correctly and 20 (or 51 percent) were prepared incorrectly. The accuracy rate for the educator expense deduction was 25 percent, the accuracy rate for the IRA deduction was 50 percent, and the accuracy rate for Schedule C expenses (hmmm… E@lert wonders why volunteers are preparing Schedules C, but perhaps that’s a question for another day) was 69 percent.
God is in the details, as always, and it is important to remember that the TIGTA sample is a convenience sample (Yes, we are taking you back to Statistics 101. We’re sorry about that.), and therefore one cannot legitimately project results over the entire population (roughly 3 million returns) of volunteer prepared returns. At the same time, even though IRS visits a statistically valid sample of volunteer sites (and therefore these results can be projected over the entire population of returns) and suggests a 92 percent accuracy rate, volunteers are aware that IRS staff are on site to review the returns they are preparing. As TIGTA notes, “Knowing the reviewer is on site introduces bias and could lead volunteers to be more quality conscious and more apt to adhere to quality procedures than they would have otherwise.”