Introduce legislation to address tax preparation scams

Tax season is one of the largest financial events for consumers, especially low-income Georgians expecting to use their refund to pay off debts. In 2016, Georgia Watch released a mystery shopper study examining paid tax preparation services in southwest Atlanta. The study surveyed consumers and found that most do not understand that their tax preparers are not licensed by the State of Georgia. It also assessed the transparency and variance of fees and error rates on returns.  We found a stunning lack of knowledge and professionalism from preparers, vast inconsistencies in preparation fees, and a wide range of refund amounts with the same scenarios. Georgia Watch would like to see legislation introduced that provides transparency and protection for consumers by mandating that unlicensed paid tax preparers disclose information to consumers such as their fees, contact information and training.  We believe this will help consumers across Georgia avoid unscrupulous practices, as well as increase transparency of preparation fees.

Research conducted by the National Consumer Law Center in Florida and North Carolina revealed a prevalence of unscrupulous and sometimes fraudulent behavior on the part of paid tax preparers both at large-scale chains and in smaller ‘mom and pop’ tax offices. Based on our preliminary survey of 110+ consumers in southwest Atlanta, 61.7% of respondents believed that their most recent tax preparer was licensed in the State of Georgia, assuming a baseline of consumer protection. However, Georgia does not currently have any type of licensing or continuing education requirement for paid tax preparers. Today, anyone in Georgia can request payment for tax preparation services regardless of their training, experience and without any guaranteed protections for clients or disclosures.