Taxes can be very complicated, and many people rely on accountants or other professionals to help them prepare and submit their tax returns and other required forms and documents. Unfortunately, taxpayers may encounter situations where they find that tax returns submitted to the IRS or the California Franchise Tax Board (FTB) contained incorrect information due to errors made by a tax return preparer. When a taxpayer faces a tax audit or tax penalties based on tax returns prepared by someone else, they will need to understand how to address these issues.
Liability for Tax Return Errors
When a taxpayer signs and submits a tax return, they are legally responsible for addressing issues related to the information they submitted. This is true regardless of whether the tax return was prepared by another person. This means that if the information provided on a tax return was incorrect, the taxpayer will usually be responsible for paying any taxes that are owed, as well as any penalties that may apply.
If there are issues related to a tax return, a taxpayer can review the contract they signed with the tax return preparer to determine their options. A contract may specify the obligations that apply to the preparer and detail the procedures that will be followed in these situations. If the preparer agrees that they made errors when preparing the tax return, they may be required to submit any required corrections to the tax return in question, and they may be obligated to cover penalties or interest related to their errors. However, the taxpayer will be required to pay any taxes that are owed.
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