Monday, July 27, 2009


It is very important for an individual who chooses to have his/her return prepared by a tax practitioner, enrolled or unenrolled, to be aware that you are ultimately responsible for all the information reported on your return.

The cover letter that I include with all finished returns contains the following –

“Please examine these returns carefully to be sure all items of income and deduction have been accounted for properly. You are responsible for all the information reported on the returns. If you find anything that is not in order or that you do not understand contact us immediately.”

I have come across several real-life examples in blog posts recently where practitioners (enrolled and unenrolled) overlooked legitimate itemized deductions but claimed excessive bogus employee business expenses or other deductions. While in these cases the preparer has committed a tax fraud – the taxpayer is equally responsible because they signed and submitted the return.

It is important to review all finished tax returns carefully before you sign and mail them.

If you made a legitimate documented charitable donation of $1,000 to a charity, but the deduction for contributions on Schedule A is only $300 - ask the tax preparer to explain.

If you have never attended a job-related conference in your life and your job does not require any special uniforms, but the return includes $3,000 for conferences and conventions and $500 for work clothes and uniforms – ask the tax preparer to explain.

If you usually get a moderate refund but this year, the first year using a new tax practitioner, you are getting $6,000 back – ask the tax preparer to explain.

Never just automatically assume the return is correct – regardless of whether the practitioner who prepared the return is an Attorney, CPA, EA, enrolled agent, or “unenrolled” practitioner, and especially if it was prepared by a commercial chain!

The error or omission does not have to be a result of incompetence or fraud. Tax preparers are human and can make mistakes just like everyone else. Hey, even I make a mistake or two each tax season (ha! ha!). I would rather have the taxpayer point it out before the return is mailed then having it discovered after the fact and needing to spend unbillable time preparing an amended return, or, worse, have the error discovered by the IRS.

And a word of advice – if you spot something that you do not understand on a finished return do not call the practitioner and tell him/her that he/she has made an error. When you call or email simply say that there is an item on the return that you do not understand.

Just because you do not understand an item on a return, or think that the preparer has understated or overstated something, does not mean that there is an error. You do not know all the intricacies of the Tax Code – presumably your tax preparer does.

I personally hate it when I get a call or email from a client whose return I have prepared and the first words out of his/her “mouth” is, “You made a mistake”!

It is also very important to check all finished returns to make sure that all Social Security numbers entered on the various pages of the return are correct. An error on a Social Security number can at least delay your refund and at worst cause the IRS to "redo" your return removing deductions and credits and changing the filing status.

There is no reason that an obviously bogus return should be submitted to the IRS or the State without the taxpayer being a “co-conspirator”.



Tom said...

If my client is not sitting there with me at the time I do their return (85% are mostly drop-offs)
when they come to pick up the copies,etc. I always sit and go over line by line with them, especially if they had any changes during the year.

That is the one thing I as home/private office tax preparer really enjoy. The clients when dropping off their tax info. are treated as friends and with some we can spend up to a hr somethimes talking about kids, jobs, sports, etc.

You don't get that at the Green Box!

Robert D Flach said...


I also enjoy spending time schmoozing with clients who still drop off - the only problem is that it takes up valuable time during a period when I have no time to spare.

You don't get much of anything at the Green Box - except a large bill!