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Australian taxpayers display reference-dependent preferences when filing their tax returns - they bunch at positive and salient thresholds. The authors develop a model of taxpayer behaviour to show that bunching heterogeneity reflects both differences in preferences and the rate at which the marginal cost of reducing one's tax liability increases. Consistent with this model, bunching has grown alongside electronically prepared returns over recent decades and the subsequent responses of tax agents. Taxpayers receiving these balances are more likely to stay with their tax agent, but do not pay higher fees. Consistent with having flatter cost curves, 'high-bunching' agents deliver larger balances more generally and do so by lifting deductions and lowering reported income for return items where audits are costly.