Tax Preparer’s Table: Who is Liable if a Return is Wrong?

We’ve seen this being discussed a lot recently and it’s also a conversation we have often when onboarding new clients after we discover mistakes in their prior tax work: who is responsible for incorrectly prepared tax returns?

Mistakes can happen for a variety of reasons - sometimes taxpayers forget to submit a tax form while other times the preparer will accidentally enter in information wrong. Sometimes in nefarious circumstances, tax preparers will intentionally falsify returns in order to get their clients bigger refunds to justify higher prep fees.

Unfortunately - usually it’s going to fall back on the taxpayer for any penalties/fees/interest that is incurred. When you sign the return, you’re signing that the information presented is correct. Thus, it’s very important that you understand (and ask questions!) when looking over your return to make sure everything is accounted for. You are allowed to make a complaint against a tax preparer in specific instances - but a big key to avoiding any of this is by choosing a tax preparer carefully who you trust.