"Jerry Natowitz"
<j-dot-natowitz-at-rcn-dot-com[at]giganews.com> wrote:

- quote -

Unfortunately there are a lot of incompetent preparers out
there. At $160 he must be trying to compete with the chains.
You can try to sue him, but once you've figured out the
correct tax (not the lower tax he conned you with), you owe
it anyway. If he's not an EA or CPA, you don't have much
other recourse. If he is, you can notify the IRS or the
state board of accountancy respectively.

--
Tom Healy, CPA
Boulder, CO
Web: http://www.tomhealycpa.com

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I would like to find out what liability a paid tax preparer
has for his mistakes. I just finished double checking the
third set of corrections to my Massachusetts 2003 return.
The first set reflected changes due to mistakes in taking
the state dependent care deduction. I found out about this
when the Massachusetts assessed me for back taxes and
interest in my 2001 return for the same thing.

When I finally (a month later) received the changes, I
examined the return line by line. Why I should have to do
this when I paid the man $160 escapes me, but I'm glad I
did. He misattributed interest and dividends. He
incorrectly attributed the FICA withholding from my wife's
W2 as mine, resulting in $2000 less deduction on the Mass.
return than I should have.

What I didn't catch is that he did this on the Federal too,
and then took a credit for excess FICA withholding. So now,
I owe almost $4000 more tax on my 2003 Federal return. Did
he even bother to tell me this. No, I had to figure it out
when instead of an expected $300 refund, I owed $3800 (plus
interest, but I don't think penalties). Interestingly, that
despite the original return being e-Filed, the IRS hasn't
flagged this yet.

He is also incompetent, the company he bought his software
from went belly-up, and rather than take his lumps and
replace the software, he continues to use it, bugs and all.
The State dependent care problems are as example, as is that
I had Code V on a W2, which should have flagged a change to
the cost basis of stock options I exercised.

I figure that there is no way I can stick him with the
additional tax, as I did owe it all along. But interest and
possible penalties? Is he answerable to either Federal or
State regulatory bodies?

--
Jerry Natowitz
j dot natowitz at rcn dot com

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