Tax Preparation Companies Competing for Business

In a practice that some accountants say cheapens the entire profession, tax preparers are going all out to make the most of the four-month tax season, relying on gimmicks of all kinds to lure customers.

The Detroit News reported that Liberty Tax Service, one of the top three tax preparation firms in the country along with H&R Block and Jackson Hewitt, are using people in Statue of Liberty and Uncle Sam costumes to hand out coupons.

H&R Block has offered a "Double Your Refund" promotion that earned winner Kevin Robertson an $11,046 refund, twice with the commercial carpenter had expected. There is a downside though-Robertson has to pay taxes on the windfall.

That's fine with him. "I work for a living. We just try to scratch it out every month. It's a lot of money for a working man," he said.

As the American tax code becomes ever more complicated, taxpayers are finding it more and more necessary to rely on professional tax preparation services. About 60 percent of Americans hire someone to do their taxes, double the percentage that did so in 1980, according to the IRS.

With just four months to make it count, tax preparation companies are offering prizes including cash, digital camcorders and a Chrysler 300 to attract taxpayer business.

“You file your taxes once a year. It's not like buying groceries where you go once or twice a week. So we only have one chance,” Peter Tahinos, senior vice president of marketing for Jackson Hewitt, the nation's No. 2 tax preparation chain, told the Detroit News. “We have to reach out to the customer as much as possible to keep our name on the top of people's minds.”

Some in the accounting profession view these tactics as detrimental to the profession, the Detroit News reported.

“The H&R Blocks of the world are going for a pure volume business. They're looking for numbers. They're not looking to build relationships,” William L. Abrams, a certified public accountant and a tax attorney with Abrams Garfinkel Margolis Bergson LLP in New York, told the Detroit News.

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