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Want good tax advice? You might not find it at the IRS.

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This story appears in the June 2004 issue of Entrepreneur. Subscribe »

You know the tax code is complicated when the IRS itself can't figure it out. According to an audit by the Treasury Department's inspector general for tax administration, IRS tax counselors provided erroneous information for 19 of the 23 returns presented by undercover auditors, for an unsettling error rate of 83 percent.

Results from the audit, conducted from February to April 2003, were released earlier this year. Auditors visited more than two dozen of the IRS' 200 Taxpayer Assistance Centers, where taxpayers meet with counselors for help with returns. Investigators found that counselors inaccurately advised clients about what forms to use, which deductions to take and what income to report. The IRS declined to be interviewed, but attributed most errors to third-party taxation software in a statement in the inspector general's report last January. The agency also added a statement saying action was underway to train counselors to do a better job of asking taxpayers about their financial status and eligibility for tax credits and deductions.

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