Facing IRS Tax debt or an IRS tax audit due to errors made by your tax preparer? Here’s a comprehensive guide on steps to take to protect yourself when your tax preparer messes up your taxes and you face IRS tax debt or an IRS tax audit.
Filing taxes is critical to IRS tax compliance, but let’s be honest, it can also be confusing, cumbersome, and downright daunting. That’s why many people hire tax preparers, hoping for an accurate and hassle-free process. But what happens when your trusted tax preparer drops the ball and you’re left facing tax debt or an IRS audit? It’s a nightmare scenario for anyone, and it’s essential to act swiftly and wisely to minimize the repercussions.
How Do Tax Preparer Errors Happen?
Tax preparers are human and humans make errors. Some common mistakes by tax preparers include:
- Incorrect calculation of income, credits, or deductions
- Missing out on crucial documentation
- Failure to include specific income streams
- Failure to keep up with ever-changing tax laws
- Miscommunication between taxpayers and their tax preparer
It’s vital to remember that even if the mistake wasn’t yours, the IRS holds you responsible for the information on your tax return. That said, all is not lost.
Immediate Steps to Take When Your Tax Preparer Messes Up Your Taxes
1. Contact the Tax Preparer
The first step is to reach out to your tax preparer. They should be willing to amend the errors and refile your tax return if possible. If they’re unwilling to help or simply do not understand the error, you may have legal recourse depending on your agreement and the nature of the error. Contacting a reputable tax attorney can also help you understand the issues. They can certainly fix the issue.
2. Consult the IRS Regarding the Tax Debt or Audit Notices
Pay close attention to the IRS notices you receive. They will spell out what the agency believes you owe, why you owe it, and how much time you have to respond.
3. Consider Paying the IRS Tax Debt
If the amount is accurate and you can afford to pay it, it may be simplest to resolve the situation by paying off the IRS debt to avoid additional penalties and interest. You can then pursue any remedies with your tax preparer separately.
4. File an Amended Return
If you disagree with the IRS’s findings, you may need to file an amended return. This can be complex, and if you don’t trust your original tax preparer to handle it, this could be a good time to consult a tax attorney.
When Should You Consult a Tax Attorney?
If you’re facing severe consequences such as a large IRS tax debt, criminal charges, or an intricate IRS tax audit, it may be in your best interest to consult a tax attorney. Tax attorneys are trained to:
- Negotiate settlements with the IRS
- Represent you during tax audits
- Advise on tax planning strategies to minimize future liability
- Defend you against criminal charges related to tax fraud or tax evasion
Choosing the Right Tax Attorney to Represent you in a tax audit or to resolve IRS Tax Debt
- Experience: Make sure the attorney has experience dealing with cases similar to yours.
- Credentials: Check for proper qualifications, like being a member of the state bar and having many years practicing tax law.
- Cost: Understand their fee structure. Most charge by the hour, while others might charge a flat fee.
You also have the option to file a complaint against the tax preparer through the IRS by submitting Form 14157. If the tax preparer is a certified public accountant (CPA), you might report them to the state board of accountancy. For attorneys, the state or local bar association can handle complaints. For enrolled agents, you may contact the IRS directly.
What If You Can’t Pay the Debt?
The IRS offers a few options for taxpayers who genuinely cannot pay their tax debt:
- Installment Agreement: You can set up a payment plan to pay off your debt over time.
- Offer in Compromise: Under certain circumstances, the IRS might accept a smaller lump sum payment.
Consult your tax attorney about these options; they can guide you through the complex application process.
How to Prevent Future Tax Issues
- Vet Your Tax Preparer: Check their qualifications, experience, and reviews before you hire them.
- Stay Involved: Don’t just hand over your documents. Stay engaged in the process to catch any potential errors.
- Understand Your Tax Situation: Basic understanding of your tax status, deductions, and credits can go a long way in preventing issues.
Final Thoughts When your Tax Preparer messes up
IRS tax problems, especially when not your fault, can be emotionally and financially draining. If your tax preparer messes up your taxes and IRS tax debt or an IRS tax audit is pending, you have options and resources to navigate this difficult time. Consult a tax attorney at Delia Law when facing severe tax issues, It is a prudent step to ensure you’re making the right moves to resolve the IRS situation effectively.
Remember, when it comes to the IRS, time is of the essence. Don’t ignore IRS notices and act swiftly to resolve any discrepancies or issues. Your future financial health might just depend on it.