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January 18, 2021

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Making mistakes can put tax preparers in tough spot

Texas tax preparers have significant responsibility when it comes to filing taxes on behalf of taxpayers. In many cases, taxpayers go to professional tax preparers because they do not fully understand how to file their taxes, how to look for deductions or how to handle other tax-related matters. Of course, tax preparers are not immune to making mistakes, and in some cases, the IRS could consider a tax preparer negligent, which could lead to serious consequences.

In many cases, mistakes relating to tax returns can be honest errors. However, if the IRS believes that a tax preparer filed false returns, made fraudulent claims, faked deductions or took other reckless or negligent actions when filing a tax return, an investigation and possible charges could come against that preparer. The situation could cause problems for the taxpayer as well, but the tax preparer could face damaging repercussions.

The exact penalties a tax preparer could face if the IRS believes that he or she was reckless or negligent in preparing tax returns can differ depending on the nature of the problem. Some possible consequences include the following:

  • Monetary penalties
  • Revocation or suspension of the license to practice
  • An injunction to suspend the preparer from practicing for a period of time
  • Damage to the tax preparer’s reputation

If Texas tax preparers have been accused of fraud or negligence after making mistakes, they undoubtedly want to limit the damage that results. Fortunately, they could assess the situation and defend against any allegations that come against them. This type of ordeal could come with steep consequences, so it is often wise to have professional legal assistance when handling such a matter.

Taxpreparer Investigations