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Research report

The Effects of Tax Software and Paid Preparers on Compliance Costs

John L. Guyton, Adam K. Korobow, Peter S. Lee, Eric Toder
July 14, 2005
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Abstract

In recent years, the percentage of individual taxpayers using paid preparers and software has increased, while the share of taxpayers who self-prepare without software has dropped sharply. Using the Individual Taxpayer Burden Model developed by IBM Business Consulting Services for the IRS, we simulate the effects of preparation method on time and money costs of preparing tax returns. When we correct for self-selection bias, we find that each group on average selects the preparation method that costs the least for them. For example, software costs more than self-preparation for current self-preparers, but costs less than self-preparation for current software users.

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Meet the Experts

  • John L. Guyton
  • Adam K. Korobow
  • Peter S. Lee
  • Eric Toder
    Institute Fellow and Codirector, Tax Policy Center
Research report

New Evidence on The Effect of The TCJA On the Housing Market

Robert McClelland, Livia Mucciolo, Safia Sayed
March 30, 2022
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