I have a tax issue and I am not sure how to treat some money that i received. If I go to a tax professional to do my taxes and the tax professionals advice end up being wrong, will I be held liable?
2007-01-19 03:44:46 · 2 answers · asked by Choudhary 1 in Business & Finance ➔ Taxes ➔ United States
If you receive tax advice from any tax professional and it turns out being incorrect, then you are legally responsible. Ignorance is not a viable excuse. Depending on what kind of money you received and who you received it from, you may need to declare it as "Other Income" on Line 21 of Form 1040. If it is self-employed income, you may treat it as such. You may need to file a Schedule C if you continuously receiving money for services you provided. In other words, it cannot be a hobby. If you file a Schedule C, you may include expenses but they must be legitimate and you need receipts to prove the expenses. The expenses must be considered "ordinary and necessary" for your self- employed work. You can read up on this using the following links.
Just remember, if a tax professional made and error and you knew nothing about it- you are still held accountable so long as you signed the tax return.
P.S. Don't trust H & R Block. After April 15, they are rarely able to be found. And they are notorious for making mistakes and doing things they should not be doing.
2007-01-19 04:16:59 · answer #1 · answered by porselin 2 · 0⤊ 0⤋
If you go to H&R BLock and they are wrong, they will provide a lawyer for you and will pay fines as well in certain cases. If they are wrong because you lied or withheld info, thats on you.
2007-01-19 11:52:38 · answer #2 · answered by YDoncha_Blowme 6 · 0⤊ 0⤋