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June 10, 2016


Lessons from the Messi trial, part 2: checking your tax return

Let’s resume our discussion of the closely watched tax evasion case involving Lionel Messi, the famed soccer star.

As we noted in part 1, Messi contends he signed tax returns and contracts without really knowing the contents. He told the Spanish court that he did so because he trusted his father, who was helping him manage his money.

In this part of the post, we will take note of a broader issue raised by the Messi case: the responsibility of a taxpayer for the contents of a return prepared by someone else.

Like Lionel Messi, many U.S. taxpayers delegate to professional preparers the detailed work of getting returns ready to file. But when you use a preparer, you still need to review your return for accuracy before signing it.

This is because when you sign your tax form, you do so under penalty of perjury. In other words, you are attesting that the contents are correct. If there is a problem with your return, you are ultimately responsible.

If there is a mistake that result in a tax deficiency, you can be held liable for that deficiency. Even worse, if there is fraud by your preparer, you can be held liable for that too.

The fact that so many returns are e-filed makes it more difficult for taxpayers to realize the significance of the signature requirement. After all, if a tax preparer files for you with your authorization, there isn’t even a signature on your tax form in the traditional sense.

To be sure, you have to sign the form (Form 887) to authorize your preparer to file electronically. But actually taking the time to review your return is another matter.

The Messi case is a reminder, however, of the importance of taking that time. If you don’t, you could be exposing yourself to tax troubles.

Tax Evasion