A study made by McKenney's group during the 2008 filing season, in which TIGTA auditors posed as taxpayers, found a majority of the returns sampled contained substantial errors. The auditors paid to have 28 returns prepared by 12 commercial chains and 16 small, independent preparers' offices. Only 39 percent of the returns were prepared correctly. Of those with errors, 65 percent had mistakes and omissions stemming for human error or misinterpretation of tax laws while the other 35 percent were from what the auditors considered willful misconduct or reckless conduct.

Panel member Michael Brostek, director of strategic issues for the U.S. Government Accountability Office, pointed to 2006 testimony before Congress on the results of a similar undercover investigation in which the GAO found mistakes in 19 out of 19 visits to the offices of paid preparers working for tax service chains.

Also on the panel were representatives of states that have toughened their standards, including Ron Wagner, executive director of the Oregon State Board of Tax Practitioners; Ruth Moore, manager of filing compliance for the California Franchise Tax Board; and Jamie Woodward, acting commissioner of the New York Department of Taxation and Finance.

One of those supporting tougher standards was Wallace Eddleman, assistant director-legal, for the Maryland Revenue Administration Division.

"It’s safe to bet that the majority of those who use paid tax preparers believed that
they were using qualified, certified and registered professionals," Eddleman said. "Unfortunately, they would be mistaken." He reported the Maryland consumer affairs office gets a steady stream of taxpayers who have had mistakes in returns or who have been deliberately mislead.