If tax consultant prepares my taxes, who is liable if consultant makes a mistake?

Question

I am kind of confused regarding my tax preparations. I am aware of some tax consultants who might be able to get me more money than some of free/paid online tax softwares.

When I spoke to them then they are indicating that there are some exceptions in my case which might not be included in tax preparation software.

I am wondering if some of these are not accepted by IRA who will be liable for the mistake/extra money that I might get in refunds. Does this comes back to me because I hired the tax consultant or the responsibility will fall on consultant since he is the expert. Please advise.

Thanks

Answer 1

You alone are reasponsible for the tax return that you sign and submit. Your signature attests that you have reviewed the return for accuracy and completeness.

Any "tax consultant" who claims that they can get you a larger refund or lower tax liability than anyone else is both lying and breaking the law. There are plenty out there who are dishonest and will fudge a return for all it's worth. When called to task, they'll claim that you provided the information and they just filled in the forms.

Answer 2

If you can prove you gave the Tax consultant all the correct documents, and he made an error, the IRS may look to him first BUT they usually start with you the tax payer. So if you use a consultant, then keep all the records you submitted, and double check your return before signing it. If someone promises you great refunds then maybe they are not so honest. There are lots or real honest deductions. If this is a licensed service they can be held liable for making false representations. This is tricky.
I have used a consultant for years and he will only do exactly what is withing the law or he looses his license and is fined.

Answer 3

It will come back on you because you and you alone are responsible for the accuracy of your taxes. If the tax preparer takes a deduction on your return that is disallowed by the IRS, you'll be the one who has to pay the additional tax.

If the IRS believes that the preparer deliberately falsifies returns, the tax preparer will also be penalized, but that won't get you off the hook.

Answer 4

Ultimately you are responsible for what is submitted on your return to the IRS. You must sign the document saying that you state the return is correct and truthful. However, a paid preparer must sign that they prepared your return. If they do something "sneaky" then you may be able to hold them responsible as well.

Answer 5

In all cases, YOU alone are responsible to the IRS for any additional taxes and any penalties. Most reputable tax preparers will pay any penalties (but not taxes) that result from their error. If the IRS suspects the tax preparer of fraud, they will review additional returns prepared by them, but that does not get you off the hook.

Answer 6

Ultimately you are responsible....However; if you use a reputatable firm like H&R Block they have a policy that they will be with you through a tax audit...you might have to pay extra for extended periods of time, but at a minimum they will justify the reason why they completed the tax return in the manner that they did.

Answer 7

You are responsible for any incorrect information on your taxes. You will have to pay for all of the mistakes. The preparer may also get into trouble, but won't have to pay back taxes, etc.

Answer 8

Yeah, you bear the burden and face the music.