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DrDeano

Well-known member
Joined
Jul 21, 2003
Messages
69
Location
Monroe, WA
anybody have any advise on how to proceed with a tax audit that's about to go quite poorly (tomorrow) due to an incapable tax preparer who falsified information on ones returns... (he claimed deductions on our returns that we had no clue about... e.g. charitable contributions to the tune of $5000)

i thought the whole reason i/we "hire" these individuals is because we don't "know" how to do them... so the fact that i/we will be held accountable for his incompetence has got me in quite a lather

anyone had any similar situations, or have any knowledge about proceeding after the audit??
 

Mauisreef

Rigameyer
Joined
Sep 29, 2004
Messages
460
Location
Sandpoint Idaho
My wife is an up and up tax preparer, no funny biz.
She is at volleyball right now and I will ask her for some advice for ya when she gets home. Hope she can help ya.

Maui
 

DrDeano

Well-known member
Joined
Jul 21, 2003
Messages
69
Location
Monroe, WA
Thanks Maui, I'd appreciate that.

My assumption is to hire a tax lawyer and "go after him", but the problem is that we are by no means the only ones he's done this to, so I'm sure we wouldn't be alone in our anger and he would likely "shut down" shop and none of us would recover a dime.

thanks again!
 

Curtswearing

Mantisfreak
Joined
Nov 20, 2003
Messages
2,203
Location
St. Louis, MO
DrDeano said:
My assumption is to hire a tax lawyer and "go after him", but the problem is that we are by no means the only ones he's done this to, so I'm sure we wouldn't be alone in our anger and he would likely "shut down" shop and none of us would recover a dime.
Mauisreef, I still want your wife's opinion...two heads are better than one!!!

If your preparer was a CPA, tax attorney, or an enrolled agent, then they are subject to strict licensing standards. If they are a CPA, bring in the Washington Society of Certified Public Accountants in on the issue (or at a minimum, threaten to bring them in). I don't know about the State of Washington, but here in Missouri if what you said is true and it was purposeful instead of a mistake, your CPA's license would be yanked in a second. Even if it was a mistake, they would be in grave danger of suspension or probation. They also likely have malpractice insurance and cannot just close up shop and run for cover. PM me the address and name of your accountant so I can do some digging....do NOT put it on the board.

i thought the whole reason i/we "hire" these individuals is because we don't "know" how to do them... so the fact that i/we will be held accountable for his incompetence has got me in quite a lather
Don't go there yet. You are in a rough position because when it comes to taxes, the burden of proof is on the taxpayer instead of the IRS unlike criminal cases where the burden of proof is on the prosecution. However, the fact that you say that you aren't the only people affected, indicates pretty good proof for your defense IMO.

Has this person told you that they will defend you with the IRS? If not, then they are running scared or are not able to represent taxpayers. In your case this is a bad thing if they cannot represent you. I know many unlicensed tax preparers who are very dedicated and do a great job and I know many unlicensed preparers who are complete idiots. (Basically, I'm saying that not everyone needs a CPA...sometimes dedicated unlicensed preparers are the way to go). However, unlicensed preparers cannot represent you and you are stuck defending yourself.

WORST CASE SCENARIO....you owe taxes, penalties, and interest because the IRS agent says you should have reviewed your return and suspected that your tax bill was too low or your refund was too big. FIRST DEFENSE...my accountant assured me that it was right. I was just thrilled with the final result and trusted my accountant completely. SECOND DEFENSE...I have since learned that my accountant has done this to more than just us. I'm more than willing to help you prosecute my accountant for fraud if you need me to. THIRD DEFENSE...I cannot afford to pay this all at once but if you ABATE the penalties and interest, I will pay the taxes that are owed on a payment plan Form 9465 (requires Adobe Acrobat Reader) and will seek restitution from my accountants malpractice carrier, if any. If not, I will sue them in small claims court. FOURTH DEFENSE...Document everything your accountant has done BY LETTER by CERTIFIED MAIL TWICE. If you do so, you can call the IRS PROBLEM RESOLUTION BOARD.

If you are representing yourself, here's some advice. Answer questions honestly and in a respectful manner. However, do not get nervous and start talking about anything other than the answer to their question. Remember these words...answers should be short, truthful, and to the point...don't say anything else. Sometimes agents get buddy-buddy and you think they are your friend...they are NOT. Sometimes seemingly innocent questions are not innocent. Do NOT tell an agent that, "You pay their salary with your taxes".
 

DrDeano

Well-known member
Joined
Jul 21, 2003
Messages
69
Location
Monroe, WA
FOURTH DEFENSE...Document everything your accountant has done BY LETTER by CERTIFIED MAIL TWICE. If you do so, you can call the IRS PROBLEM RESOLUTION BOARD.
Cert. mail to the preparer?

First off, thanks for the VERY thorough reply I really appreciate the knowledge and advise. It will help after the hearing tomorrow to revisit your reply to decide on where to go/what to do. I will keep you informed of what happens and may request (if you don't mind) your suggestion(s)

Thanks again, IOU!

Dean
 

Curtswearing

Mantisfreak
Joined
Nov 20, 2003
Messages
2,203
Location
St. Louis, MO
Glad to help...don't send ANYTHING to your preparer....let the idiot sleep under his/her desk scared to death. Send things certified (return receipt requested) to the IRS.

These two letters would happen in this manner. You get a worst-case scenario letter saying you owe back-taxes, penalties, and interest so you respond to the letter (including a photocopy of the IRS' notice) and respectfully request that this matter be looked at because of XYZ...would you please reconsider??? Ask for an abatement again of penalties and interest. If necessary, respond to a second possible negative notice and respond to that with another letter (KEEP COPIES OF EVERYTHING!!!). Give it a couple of weeks to make sure it is in the "system" and call your problem resolution board.
 

DrDeano

Well-known member
Joined
Jul 21, 2003
Messages
69
Location
Monroe, WA
I am very grateful to you and will give you some follow-up after tomorrow (I basically already know that there will be penalties due to the fact that I have discovered his malicious "errors" and the fact that a number of my friends/family have used his services and we've all been called in and my brother-in-law and his wife got nailed for $16K... same thing with them... he wrote in a number of blatantly false figures like charitable contributions, only reporting 1/2 the income that they told him they make and a number of other "errors")
 

Mauisreef

Rigameyer
Joined
Sep 29, 2004
Messages
460
Location
Sandpoint Idaho
My wife said act stupid about the errors. Ultimitly you are responsible for your returns and the worst thing that can happen is you will have to pay money back with interest and penalties. If he was not a CPA this guy has no liability. If its black and white you should just take your lumps. If it's something you feel you can fight and cost wise it would be in your favor to fight it then hire someone. Not fun brah I know.
Good luck to you. I wish you well.

Maui
 
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