The study looked at the accuracies of paid tax preparers who had not passed a certification test or had experience working for the Internal Revenue Service.

Nineteen outlets of several tax preparation chains -- which were not disclosed by GAO -- were audited. Of the 19 visits, only two prepared the tax return with the correct refund amount. However, those two refunds still contained errors.

Bad advice and incomplete reporting were main culprits. In one hypothetical return, the taxpayer said she was a single mother, but none of the tax preparers applied the child and dependent-care credit. In another scenario, a plumber's deductions were itemized in just two returns.

Had these inaccuracies been discovered by the IRS, the tax preparers would have been subject to penalties for such things as negligence and willful or reckless disregard of tax rules, said GAO.

According to GAO, 56 percent of all individual tax returns filed for tax year 2002 used a paid preparer.

GAO cautioned that the study sample is too small to be generally applied to all paid tax preparers.

The report is GAO-06-563T.