It is that time of year again, and it always seems to come at the worst time. To help take the stress off your shoulders, you decide to hire a tax preparer. However, you receive a letter from the IRS stating that there were several mistakes on your tax return. When this happens, even if it was accidental or not, you will be on the hook for any extra taxes, penalties, and interest. If you find yourself in this situation, here is what you should do next.

Get in Contact with Your Tax Preparer

After receiving the notification from the IRS, you should first call your tax preparer and ask for an explanation. Some tax preparers may offer to pay any additional fees, taxes, and penalties due to these mistakes. If it was an honest mistake, then the preparer may pay these extra fees directly or “appeal to the IRS to have them abated,” according to “What To Do When Your Tax Preparer Screws Up.”

However, if these mistakes were actually fraudulent in nature, then you should not contact your preparer to have these fixed. Instead, you can file a complaint with the Office of Professional Responsibility at the IRS and the state agency where the preparer is licensed. After a thorough investigation, it could result in the IRS revoking their identification number and revoke or suspend their license. If they aren’t a licensed tax preparer, then you would want to seek legal action.

Other Actions You Should Take Immediately

Keep in mind that regardless if the mistake was made by your tax preparer, you are still on the hook for the amount owed. Getting the tax preparer to cover your losses may take time, and as such, you should just pay the penalties and continue taking action against the tax preparer. If the IRS doesn’t receive payment, you are the one that will suffer.

According to “What To Do When Your Tax Preparer Makes A Mistake,” you should review any contract that you signed with the tax preparer. Check if there is any language that stipulates what will happen in the event that the tax preparer makes a mistake. Keep in mind that if there is a mistake due to you not providing them with proper documentation, then they won’t pay anything on your behalf.

How To Reduce The Odds Of A Mistake

It is imperative that you take steps to prevent getting audited or owing a substantial amount of money. Just because you hire a tax preparer doesn’t mean that it is not possible for them to make mistake. To avoid this situation, here are some simple things you can do to vet your tax preparer and make sure that your tax return isn’t submitted with mistakes.

  • Find an Enrolled Agent: These individuals are certified public accountants and have experience preparing tax returns. Make sure to talk with their past clients and do research into the work they have done previously.
  • Pay A Flat Rate: Preparers who charge a percentage of your tax refund may be more tempted to fudge the numbers to increase the amount of your return.
  • Make Sure You Provide All Accurate Documentation: As mentioned before if the mistake is due to you not providing them with accurate information or documentation, they will not pay any penalties on your behalf.
  • Review Your Tax Return Before Signing: Review your tax return with the preparer and make sure for yourself that everything is on order before signing your return.

We are all human, and humans are prone to mistakes. But if you take these necessary steps, you can significantly reduce the chances of a mistake on your tax return.