Taxpayers in the United States are frequently advised to avoid overpaying their interim taxes. This study seeks to illuminate an underlying cause of tax refunds and a wealth‐related consequence that tax refunds may engender due to the employment of a tax professional. Results indicate that tax professionals advise taxpayers to make larger quarterly estimated tax payments when they believe that tax refunds positively influence taxpayers' willingness to pay higher tax return preparation fees. In addition, results indicate that tax professionals bill taxpayers for larger fractions of billable fees when taxpayers receive tax refunds than when they owe the IRS additional taxes, holding the tax liability and other factors constant. These results suggest that taxpayers should be cautious about using their tax position as a heuristic to evaluate the performance of tax professionals, and that the overall cost to taxpayers of receiving tax refunds may be considerably higher than is commonly believed.
