Confessions of an Amateur Tax-preparer


Tax (Photo credit: 401K)

Not long after I retired from my civilian job I was looking for a pastime activity that would keep my brain active and I decided to try being a volunteer tax preparer with the organization, VITA. It has always seemed to me that it would be some kind of cop-out not to be able to follow written instructions. I volunteered for tax season three years    running and it was interesting. I was a little disappointed to find that the “course” for volunteers was not really so much a course as it was a one-week blitzkrieg refresher for people who already knew the ropes, but I took it on as a challenge and I figure I did all right. Virtually all the other people in the class were old hands, having retired from the trade and in it simply for the psychic income. Nice people all. Fortunately, I have always done my own taxes, including the taxes on my sister’s disability trust, so I had that experience to fall back on.

Tax preparation is a large industry in this country. According to a U.S. News & World Report article last fall, there are about 800,000 people doing that, some 200,000 of whom are CPA’s. H&R Block alone hires about 100,000 seasonal workers every year. Reading this caused me to marvel at the implications of switching to a flat tax, as recommended by Herman Cain (9-9-9), Rick Perry (20% across the board), and mildly-praised by Mitt Romney. Yes, a flat tax would relieve a lot of frustration at tax time, but there would also be a million new unemployed, not to mention 435 frustrated Congress creatures left without a major means of tinkering!

Another thing I found in researching this subject is that while the think-tank Tax Institute issued a damning and widely-quoted report in 2005 that claimed that it costs 22 cents for every dollar the system collects, it simply isn’t true. Computer software has actually cut the time involved, something well-researched by former tax specialist Larry Walker, Jr. He points out that the trend to electronic returns has accelerated and is meeting success. He says that using software, a Form 1040 with Schedule A, plus a state return, takes about an hour to prepare and the fee “averages $150.” Now, to me and my depression-era instincts, $150 is still a lot of money, considering I can get my own software and follow the instructions, but isn’t it interesting that most people don’t consider the price unreasonable?  I thought it interesting to read some years ago that the Tax Commissioner himself did not do his own return, but hired it done. There might be a sandwich parallel to the concept: just consider the Subway hoagie: You pay about double the cost of ingredients for the privilege of standing there and telling someone else just what munchies to put on as they build your sandwich for you. That says a lot, doesn’t it?

No, it’s not the difficulty of the system itself that concerns me, but its opacity. The sheer complexity of the tax code defies logic and as soon as it starts to makes sense, I find it fools me. That’s because it isn’t designed to be intuitive, but rather is a massive patchwork of political manipulation that is permanently under construction. I found evidence during my work in the field that the body politic has accepted this reality. People would present their W-2’s, their 1099’s, their Social Security statements, and sometimes an incredible shoe box of miscellaneous paper, and then compliantly and patiently wait until I had entered the data. I don’t recall anyone ever wanting to vet their forms or question a single figure on the printed return – they only cared about the bottom line. The machine never lies. And, as far as I know, it never did – but where might this lead? We are venturing beyond control, it seems to me. Remember the scene from the movie of H. G. Wells’ novel, The Time Machine? Remember how the people of the future responded when the giant gong began beating? Yep, same look.  That’s why I felt even better for getting their thanks and that psychic income.  If not for me, some Moorlock might have done a worse job and charged them $150 in the bargain!

About Jim Wheeler

U. S. Naval Academy, BS, Engineering, 1959; Naval line officer and submariner, 1959 -1981, Commander, USN; The George Washington U., MSA, Management Eng.; Aerospace Engineer, 1981-1999; Resident Gadfly, 1999 - present. Political affiliation: Democratic.
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5 Responses to Confessions of an Amateur Tax-preparer

  1. PiedType says:

    I did my own taxes for a number of years, assuming, as you did, that a half-way educated person who could read could do it. Especially after I figured out that the H&R Block people had often been hired off the street just a few weeks before. Then I made a small mistake one year and repeated it the next two years. I got audited. Very minor penalty. But it scared me so much I decided it was worth it to put a CPA between me and the IRS. You’re a braver man than I, Jim Wheeler!


    • Jim Wheeler says:

      IMO, you are absolutely sane to be terrified, Pied. I cared for my aunt, my mother’s sister, for two years and managed her finances after she got dementia. The OK tax officials froze her accounts for a year until they could be assured they would get every cent that was coming to them from the Oklahoma Estate Tax. When my mother died, I listed too high a value on her house on a form and then tried to get it adjusted, all to no avail. They stonewalled me and all the power was on their side. The deck is absolutely stacked against the little people. Now, if you have offshore accounts and expert CPA firms to watch your back, it’s entirely different. Government goes after the prey that’s easy to catch. No, you have every right to be afraid. Be very afraid. 🙄


  2. I have a friend who lives in Germany – a Swedish citizen who has been in Germany working for Linux for some years. We chat on IRC. When I mentioned the hassle of getting tax documents together to take to our tax preparer, he responded
    “I don’t understand why your taxes are so complicated that you have to use
    a professional to do it. With my taxes, everything is reported to the tax authority,
    I just sign a statement that I have looked at the reported numbers and that
    they are accurate and that’s it.
    I would gladly accept a higher tax rate in exchange for a system that works like this.


  3. ansonburlingame says:

    To all,

    A normal Naval Officer’s taxes are rather simple. But I used H&R Block for years in filing my returns. The expense was no big deal.

    When I remarried my wife had been using a CPA to do her returns for years so I went along with that practice but the expense became a burden. Last year I used TurboTax and all went well with no audit. I am doing the same this year. In the case of TurboTax the computer indeed does it all and I have no idea the algorithims involved. I just type in the numbers from the forms collected and my tax liability appears “out of thin air”.

    As a “little guy” with no tax havens or other “loopholes” it seems straightforward but the taxes that I pay are very high, it seems to me, far more than 15% for sure. And I in no way am “rich” by any stretch of the imagination. But in my situation I for sure am carrying my “fair share” and maybe more in terms of federal income taxes (and state as well).

    To me the solution is rather simple. The really rich pay less as a percentage of income than I do. And 50% of earning Americans pay zero. Now why is that?

    It is the tax codes. Fix those to make them really simple based on strictly INCOME, with no deductions, loopholes, etc, pick a percentage and let’r rip to collect the revenues we need for the federal government. The progressivity comes from the INCOME collected by individuals, period with the rich paying far more than the poor or even “little ole me”.

    The real beauty of such a system is that when Congress passes a bill requiring additional federal revenues of any sort, the same bill would impose a new percentage on American tax payers, ALL American taxpayers. Then watch how that new bill goes through the legislative process!!!

    It is going to be happening right here in Joplin come April with a $62 million bond issue up for a vote for our schools. Now watch that fur fly around here in the next two months.



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