Client variables associated with four key determinants of demand for tax preparer services: An exploratory study

Gary M. Fleischman, Teresa Stephenson

Research output: Contribution to journalArticlepeer-review

9 Scopus citations

Abstract

SYNOPSIS: There is a rich literature associated with the dichotomous decision to hire/not-hire tax preparation services. There is also some research assigning motivation to the decision to hire tax preparation services. However, no research has examined the underlying demographics and key perceptions of clients that do hire tax preparation professionals to determine which are associated with specific motivations to hire. We focus on the four most common motivations to hire a preparer found in extant literature (i.e., saving money, saving time, legal compliance, and protection from the IRS). Using survey data, we perform exploratory analysis using MANCOVA to discover what client demographics and perceptions underlie each motivation. Our most noteworthy finding is that client perceptions of tax advocacy are positively associated with all four focal motivations to hire. Our results also suggest that female clients, more than male clients, choose tax preparers with a desire to save time and to be legally compliant. In addition, taxpayers with children tend to be more concerned with legal compliance. We also find that taxpayers with relatively complex returns are less likely to hire a preparer to provide a legally compliant return and to gain protection from the IRS.

Original languageEnglish
Pages (from-to)417-436
Number of pages20
JournalAccounting Horizons
Volume26
Issue number3
DOIs
StatePublished - Sep 2012

Keywords

  • Demand for tax preparer services
  • Legal compliance
  • Protection from IRS
  • Saving money
  • Saving time

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