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What to do if your tax preparer makes a mistake

On Behalf of | Aug 10, 2022 | Tax Controversies

Many people hire a tax preparer to make sure their taxes are done quickly and on time. Unfortunately, hiring a professional does not guarantee that your income tax return will be completed error free.  Even if the error in your taxes is the fault of your preparer, the IRS holds you responsible for paying any additional taxes, interest or penalties and the fees associated with the error. Here are four things that you can do if you realize that your tax preparer has made a mistake on your return.

Contact your preparer

If you receive a letter from the IRS that claims there are mistakes in your text return, contact your tax preparer immediately. Service will vary by company, but many tax preparers may offer to pay any fees, penalties or interest charges in part or in full if you can demonstrate that they were at fault. Check the contract you signed with your tax preparer for language addressing your rights in cases of their mistake since they may not offer these reparations if you do not advocate for yourself. Even if you are not able to recoup the cost of the mistake, speaking with your preparer will help you better understand the error for subsequent tax seasons.

Pay all penalties promptly

If the IRS claims that you owe additional taxes and fees due to a mistake in your tax return, make sure that you pay them promptly, even if you were not directly at fault. Regardless of whether your tax preparer will later cover their expense, you are the one who will face additional financial penalties if the IRS does not receive the money in a timely fashion.

Know the statute of limitations

If you identify an error in your tax return, it is a good idea to check your tax returns for the prior three years to assess whether similar mistakes had been made previously. In most cases, the IRS can review, analyze and resolve tax issues for the prior three tax seasons. After that point, your taxes are outside the statute of limitations and you cannot be fined or reimbursed, even if an error is discovered. However, if your tax preparer made a substantial error, the IRS can pursue legal actions as far back as six years. It is worth noting that there is no statute of limitations protecting individuals who knowingly file fraudulent tax returns, evade taxes or fail to file taxes.

File a complaint

If you believe that your preparer purposely made an error on your tax return, alert the IRS and tax professional organizations. You should especially file a report if you believe your tax preparer behaved unethically, violated the terms of the contract you signed with them or deliberately avoided contact with you.

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