As the end of the year approaches, many individuals prepare to file their taxes, frequently opting for the services of accountants who manage this often daunting task through e-filing. However, there exists a critical need for taxpayers to remain vigilant over their accountants and the processes they employ, as failures in timely filings can lead to costly penalties imposed by the IRS. Bruce Bell, a seasoned attorney, highlights the importance of safeguards in this arrangement to help taxpayers avoid the pitfalls that can arise when relying on a professional.
When complications arise, such as the failure of an accountant to file a tax return on time, the question of penalty abatement often comes into focus. Unfortunately, according to Bell, the IRS is stringent in this regard, as penalties for late filings and payments generally cannot be abated simply because a taxpayer relies on their accountant’s expertise. This culminates from a precedent set by a 1985 U.S. Supreme Court decision, which ruled that taxpayers bear the burden of responsibility for their filings and obligations, irrespective of whether they engage professional assistance. As a result, individuals may find themselves saddled with penalties that they feel are unjust, yet they remain liable.
Bell elaborates on relevant case law, emphasizing a recent U.S. Court of Appeals decision which further cements this understanding. In the case, the taxpayer contended that they should not be held accountable for the failure of their accountant to file electronically, as they had timely authorized the submission. However, the court maintained that the essence of responsibility rests with the taxpayer, invoking the requirement for electronic filing by preparers. This pivotal ruling underscores a key principle: taxpayers cannot evade penalties for failures occurring during the preparation and submission process, regardless of whether they or their accountants handled the returns.
Amidst these stringent regulations, Bell offers practical recommendations for taxpayers to safeguard themselves against potential negligence or errors by their accountants. For instance, it is advisable for taxpayers to proactively follow up with the IRS to confirm the timely submission of their tax returns. This simple step can help avert unpleasant surprises later on, such as unexpected penalties or compliance issues. Additionally, inquiring about the e-filing capabilities and software employed by preparers can provide further assurance that returns will be managed appropriately.
Moreover, Bell advises that taxpayers have the right to take ownership of their returns if they suspect their accountant is not acting with due care. In some circumstances, taxpayers can retrieve completed returns and mail them to the IRS themselves. This proactive measure not only helps establish a paper trail but also mitigates the risk of penalties stemming from the accountant’s oversight. Ultimately, remaining vigilant and taking on a more active role in the tax preparation process can help prevent financial repercussions that arise out of reliance on professional help.
While there is potential legal recourse available for taxpayers who find themselves penalized due to a lapse in their accountant’s duties, it is essential to understand that these remedies may not erase the penalties imposed by the IRS. Engaging a professional should ideally afford peace of mind, but taxpayers must also be prepared to step up for their own interests. As tax season approaches, individuals would benefit from understanding their responsibilities and the importance of regular communication with their accountants to ensure compliance and avoid harsh penalties.