In the USA, the 2023 Tax Season is underway, and taxpayers are reminded to be vigilant and take responsibility for ensuring their returns are filed on time. A recent court case highlights the importance of taxpayers double-checking their tax preparer’s work.
L, a taxpayer, provided all necessary information to his CPA, approved draft returns, and directed the CPA to e-file them. However, the CPA failed to file the returns over three tax years, resulting in interest and penalties totaling $289,000.
The taxpayer argued that he should not be liable for penalties and interest as he had reasonably relied on a qualified tax professional. However, the court ruled in favor of the IRS, stating that taxpayers cannot delegate the responsibility of timely filing returns and paying taxes due. While taxpayers can avoid penalties for underpayment due to incorrect advice from a qualified tax pro, they cannot avoid the obligation to file on time.
This case serves as a warning to all taxpayers:
- Refrain from solely relying on your tax preparer to file your returns.
- Confirm receipt of e-filed forms and ensure timely filing to avoid costly consequences. While your tax pro may be liable for damages, you remain liable to the IRS for penalties.
Take control of your tax obligations and protect yourself from potential financial burdens.
NB: This post is for general information purposes only and should not be considered professional tax advice.
The Accountant.
Accounting Stewards 