The study found that of the 71 million taxpayers who used a tax preparer in tax year 2000, 77 percent were "very" or "generally confident" that their preparer completed a tax return that allowed them to pay no more in taxes than was legally required.

 

However, five percent reported they were "not at all confident" in the returns prepared for them. This is concerning, said the GAO, since five percent amounts to more than three million unsatisfied taxpayers.

 

Additionally, the study found that in tax year 2000:

The GAO said paid preparers must "probe the personal circumstances that could affect the amount of tax their clients owe." The agency cited instances where preparers ignored or overlooked key tax credits, despite client notification. 

 

The GAO suggested steps taxpayers can take when choosing or working with a paid preparer. For instance, obtain recommendations from people you trust; check out the preparer's qualifications; understand the services, cost, and benefit; and review the completed return before signing it.

 

Research on the topic was initiated by the GAO because little data exist on the quality of service provided by tax preparers.

 

Separately, the GAO on Tuesday recommended several steps that taxpayers should take when donating a vehicle and claiming a deduction. These include: verify that the recipient organization is tax-exempt; ask questions about vehicle donation proceeds; deduct only the fair market value of the vehicle; and follow state laws regarding title transfer for vehicles.

 

Of the 129 million individual returns in 2000, 0.6 percent -- or 733,000 -- had tax deductions for vehicle donations.