You keep asking yourself the question: where did I go wrong, correct? You remember paying all your taxes on time, but you have just been informed that you still owe money to the Internal Revenue Service (IRS). Stop blaming yourself and think again. Did you even hire the right tax preparer? If not, then you need to ask the question: can I sue my tax preparer?
Guilty: Can I Sue My Tax Preparer?
Understanding Who to Penalize and When
If you hired a licensed tax preparer, then you are probably thinking that they are responsible, right? Well, yes and no. If you did not pay the dues you owed, then it’s on you. However, your tax preparer may be held accountable if they committed negligence or malpractice.
There could be a strong possibility that the error might be from the tax preparer’s end. But it can be on you as well if you provide incorrect or incomplete information. If that turns out to be true, then you will have to pay the interest and the penalties.
But if your tax preparer made deliberate calculation errors, and made incorrect deductions, then it’s on them. They should pay the interest and penalties and submit an amended form at no charge. However, if you find out that it’s your fault, you should still inform your tax preparer.
Negligence: Suing Tax Preparer
Should the Tax Preparer be Held Accountable?
Yes, a tax preparer can make a mistake because they are, after all, human. But if you think that your tax preparer has to pay for his/her mistake, then you are wrong. Remember, since it’s your tax return, it’s your responsibility to pay the interest and penalties.
However, if the tax preparer is suspected of misconduct, then he/she can be reported to the IRS for audit and penalties. The report for misconduct usually results in suing for damages. Tax preparers are expected to rectify their mistakes by taking the necessary corrective action.
Worried About Tax Season?
Say goodbye to stress and let us manage your
numbers with meticulous care.
The corrective actions include filing for an amended return, informing the IRS, or compensating or repaying the lost amount to the taxpayer to straighten things out. However, if the contract does not require them to do so, then they do not have to pay for any liabilities.
Despite the contractual agreements, if the tax preparer is found guilty of negligence, you can sue them by showing the following:
- The tax preparer owed you a duty of care to calculate your taxes, but he/she failed to fulfill that particular service.
- The tax preparer breached their duty by acting carelessly and unreasonably in a way that they ended up calculating the taxes through an incorrect program code.
- The tax preparer’s calculations were incorrect due to carelessness and not because of your oversight.
- As a result of the tax preparer’s carelessness, you had to suffer financial harm and damage from the IRS.
Before taking any action, familiarize yourself with the IRS regulations. As per the guidelines by the IRS, here are some instances in which you can report a tax preparer:
- The tax preparer did not inform you before filing an individual Form 1040.
- Made changes to the tax return documents.
- Generated a substantial refund by using incorrect filing status.
- Generated refund by creating false exemptions.
- Omitted income by false information.
- Generated a substantial refund by creating false and incorrect expenses, deductions, or credits.
- Misdirected the refunds.
Suing Tax Preparer via IRS
File a Complaint Against the Tax Preparer
According to the IRS, most tax preparers are honest, reliable, and professional. But when it comes to investigating the improper ones, the IRS is committed to penalizing and holding them accountable. Here’s how you can report a tax preparer’s misconduct to the IRS:
- The tax preparer filed the Form 1040 series return without informing you or without your consent.
- The tax preparer has altered your tax return documents.
- They used incorrect filing status in order to generate a substantial refund.
- Created false exemptions or dependents to generate a substantial refund.
- Omitted income stats for a larger refund.
- Created false expenses.
- Created false deductions.
- Created false payroll taxes.
- Misdirected your refund for their own benefit.
Tailored Solutions to
Your Business
Needs
We believe that each business is unique, which is
why we tailor our bookkeeping services to meet your
specific needs. From companies to established businesses,
we have your back!
Contact-Us
And if your tax return or refund has not been impacted in any way, then you can report a tax return preparer for improper tax preparation. The IRS firmly believes that any fraudulent activities should be immediately reported. It can be difficult, but let them handle it. Here’s what you need to do:
- Failed to enter the Prepare Tax Identification Number (PTIN) on a tax return.
- Refused to provide or update the clients with a copy of their tax returns.
- Did not sign tax returns that were prepared and filed.
- Neglected to return the client’s records.
- Withheld the records until the preparation fee was paid.
- Used off-the-shelf tax software or IRS Free File.
- Claimed to be a false attorney.
- Claimed to be a certified public accountant.
- Claimed to be an enrolled agent.
- Claimed to be an enrolled retirement plan agent.
- Claimed to be an enrolled actuary.
Lighten Your Load with
Affordable BookKeeping
Packages
We offer competitive packages that won’t break the bank,
and up-front pricing so you know exactly what you’re getting
as your return on investment.
Conclusion
It is true that if a tax preparer fails at their job, then you have to pay the price. But that is only applicable when you have to pay the interest and penalties. If a tax preparer intentionally shows negligence and malpractice, then the IRS will step in for investigation.
Most tax preparers are certainly reliable, responsible, and professional individuals. However, there have been reported instances. They have been found guilty of misusing their client’s information for their own benefit. Hence, they can be reported, and there is a proper way to do it.
The only thing that you need to know is how you can report a tax preparer. Now, you can report them via the IRS, or you can take measures at your end. Either way, tax preparers should be held accountable if they are found guilty.
Suing a tax preparer is one thing, but having your taxes filed and prepared is another. You don’t want to get into trouble at the hands of the government or the IRS, do you? Discover how you can simplify tax filing and preparation through professional services and by streamlining the process.
Worried About Tax Season?
Say goodbye to stress and let us manage your
numbers with meticulous care.
