First Advisor

Grover Rodich

Date of Publication


Document Type


Degree Name

Doctor of Philosophy (Ph.D.) in Systems Science


Systems Science




Tax consultants -- United States, Tax consultants



Physical Description

4, viii, 151 leaves: ill. 28 cm.


Occupational regulation of many professions has grown in magnitude and complexity in the past fifty years. Statutes relating to occupational regulation are often implemented by state legislatures without sufficient quantitative analysis.

Prior studies have analyzed the need for regulation to protect consumers. Some research has been published which addresses the differences in the quality of services offered by regulated and unregulated professions. Due to lack of data, the effect of state regulation on commercial income tax preparers has not been quantified.

Recently data from the 1979 cycle of the Taxpayer Compliance Measurement Program (TCMP) has been made available by the Internal Revenue Service (IRS). These data provided the opportunity for analysis relating to questions of quality of services offered by commercial income tax preparers.

The analysis evaluated differences in error rates or amounts between returns prepared in a highly regulated state--Oregon, a state with minimum regulation--California, and the remaining forty-eight unregulated states. Items were chosen from the tax returns to evaluate the integrity and competency of the tax preparer, the effect of continuing education, and the accumulated effect of the totals of income, adjustments, and deductions.

Descriptive statistics, cluster analysis, and non-parametric methods were used to test the hypotheses. Descriptive measures indicated that Oregon's error rates were among the lowest while California's errors were among the highest in the country. Cluster analysis grouped Oregon with states in the midwest while California grouped with other states in the sunbelt.

The non-parametric tests indicated that Oregon's error rates and amounts were statistically smaller than the unregulated states. When Oregon was compared to the clustered states or to other states in the Northwest, the differences were not significant. When the samples from California were compared to those from the unregulated states, it was evident that the error rates were substantially higher in California. When California's errors were considered relative to the states from the sunbelt, the results were similar. The final comparison was made relative to levels of regulation. The errors on the returns from California were significantly larger than those from Oregon in all areas tested.


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