Had an accountant who prepared taxes, now being audited. Who is responsible for it?

Question

Being audited from 3 years back. Paid an accounting firm to prepared my taxes, that accountant is now gone, and his supervisor has no idea what was done. Am I liable for this problem or is the accounting firm?

Answer 1

The accounting firm is still liable for the error and to the IRS, it would seem to me. Check with your local IRS office to be sure. It's my understanding whoever signs the income tax form, whether it is the preparer or the individual taxpayer, is the one liable. In the case of the preparer being out of the employ, it would go to the responsibility of the firm in which the accountant was employed.

Answer 2

Generally, the firm that prepared your tax return will be responsible for the audit. BUT, remember you are dealing with the IRS, and they will require the documentation used to prepare the return.

Answer 3

You are liable. But most reputable firms will stand behind their work and pay interest and penalties if the error was theirs, although they aren't required to by law. You'd still be responsible for the additional taxes. If the error was yours, for example you didn't give them all your paperwork, then they have no responsibility for the problem.

Answer 4

You are always liable for the amount of tax underpaid, regardless of who did the return. However, penalties (if any) and interest should be paid by the preparer. Check your contract with the preparer for details.

Answer 5

You didn't say what the problem is. If they compile your taxes based on information you give them and you deliberately withhold or misrepresent something, then guess who is to blame.

If they committed an error in their calculations, they should take the fall but maybe none of these issues will arise and it is just an audit that will go nowhere.

Answer 6

Sorry to say, but you are. But, if you have to pay a huge amount, you can always appeal to the IRS to lower whatever it is you owe.