It’s common to assume that when you hire a Certified Public Accountant (CPA), your taxes are going to be error-free. In a large majority of cases, your taxes will be safe in the hands of a CPA. But what happens when you are notified of an error or discover an error that costs you hundreds or thousands? In this article, Jeffrey Anton Collins, your tax consultant, will be sharing how to handle mistakes on your tax returns that result in an IRS audit. Remember, one of the biggest mistakes you can make when dealing with the IRS is to ignore them. They will find a way to get the money they believe is owed to them — especially if it exceeds $100,000.
What To Do About Tax Return Errors By Your CPA
It can be shocking to find out that your CPA made an error on your taxes, but you can do something about it after the fact. Here are five recommendations:
#1. Consult Your Tax Preparer
The IRS will send you a notice of errors or mistakes, which you can then take to your CPA or tax preparer for an explanation. In most cases, a tax preparer who makes mistakes will be willing to pay for some, if not all, of the associated fees.
#2. Pay The Charges
Whether you made the mistake or your tax preparer made it, you need to pay the penalties. The worst mistake you can make is to ignore the IRS. They do not care if it was your mistake or your CPA’s mistake. They’ve issued a penalty, and it needs to be paid. Avoiding the IRS is only going to cost you more money in the long run in more fees and potentially hiring a criminal tax attorney to defend you from criminal charges.
#3. Review Your Contract
Within most tax preparation contracts, there is language explaining what will happen in the event of an error or mistake made by the CPA. You’re looking for how the tax preparer will handle the error — and what you can do to have it remedied.
#4. Confirm Statute of Limitations
If your tax preparer made you overpay on your taxes, you have three years to file a claim. You must be able to provide proof via documentation for this claim to be considered. What’s more, the IRS has the same amount of time to go after you for underpaying. If the IRS made a mistake and excluded more than 25 percent of your gross income, they have six years to collect.
#5. File Your Complaint
In some cases, your tax preparer will intentionally make a mistake. For example, they will boost your return due to a mistake on your return. You can file a complaint with the Office of Responsibility at the IRS, as well as the American Institute of Certified Public Accountants, the National Association of Enrolled Agents, or your state law association. These filed complaints could result in your tax preparer facing charges and penalties.
How To Avoid Tax Mistakes
The best way to avoid tax mistakes is to thoroughly vet the tax professional you’re entrusting with your taxes. Start by examining their experience and years in the industry, as seasoned professionals are more likely to navigate complex tax situations effectively. Additionally, check for any prior complaint filings or disciplinary actions to ensure they have a clean professional record. It’s also beneficial to seek recommendations and read reviews from other clients to gauge their reliability and expertise.
If your tax debt exceeds $100,000 and you’re facing charges, taking immediate action is crucial. Schedule a consultation with Jeffrey Anton Collins, who specializes in handling significant tax debt and can provide you with the guidance needed to address your situation. Don’t hesitate — call today to secure expert assistance and avoid costly tax mistakes.