Reed Krystia, Wagner Morgan, Tizpaz-Niari Saeid, Trivedi Ashutosh
Department of Psychology, University of Texas, El Paso.
Department of Computer Science, University of Texas, El Paso.
Law Hum Behav. 2025 Jun;49(3):250-262. doi: 10.1037/lhb0000600. Epub 2025 May 15.
The complexity of tax laws makes manual preparation difficult, leading more taxpayers to use software or accountants. This study presents an experimental analysis comparing taxpayer perceptions of trust and procedural justice when filing with tax experts versus using tax software. The study addressed four questions: (1) How do perceptions of human tax experts compare to tax software? (2) Do perceptions vary among different types of tax software? (3) Do trust and procedural justice predict filing decisions? (4) Can taxpayers effectively oversee tax preparation software?
We hypothesized that participants would favor professional tax experts over commercial and Internal Revenue Service (IRS) software (Hypothesis 1). We also expected higher procedural justice to correlate with greater satisfaction (Hypothesis 2), self-identified knowledge to correlate with accurate expectations (Hypothesis 3), and filing decisions to be predicted by trust in the method (Hypothesis 4a) or outcome (Hypothesis 4b). We anticipated that higher trust in software would increase the likelihood of filing with software (Hypothesis 5) and that inconsistency across methods would decrease filing likelihood (Hypothesis 6).
In the experiment, 146 taxpayers (64% women; 88% Hispanic; 75% White; = 27.55 years) prepared their taxes using three methods: a tax professional, commercial software, and IRS software. Participants rated and ranked the trustworthiness of each method and indicated their preference.
As predicted, participants had the most favorable perceptions of the tax expert, followed by commercial software and IRS software (Hypothesis 1). Trust in the method, not the outcome, predicted filing decisions (Hypothesis 4a). Participants with higher trust in software were more likely to file with software (Hypothesis 5). Contrary to expectations, procedural justice did not correlate with satisfaction (Hypothesis 2), and knowledge did not correlate with accurate expectations (Hypothesis 3). Consistency across methods did not predict filing (Hypothesis 6).
Participants generally preferred human experts, but trust in software could override this preference. Future research directions and implications are discussed. (PsycInfo Database Record (c) 2025 APA, all rights reserved).
