DETERMINANTS OF TAX PREPARER USAGE - EVIDENCE FROM PANEL-DATA

This study provides new evidence on the factors associated with using tax return preparers from a balanced panel of microlevel tax return da ta for 1982-4. The results of fixed-effects logit models that control for unobservable differences across individuals indicate that (1) the time-cost of return preparation has a positive albeit small impact on preparer use, (2) the type of tax return filed and employment status a re important determinants of preparer use, and (3) the effect of incom e and marginal tax rate on preparer use in models that control for com plexity and source of income is unclear.