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How the IRS deals with errors on tax returns

On Behalf of | Jan 30, 2023 | Blog, White Collar Crimes |

Most Michigan residents hire a professional to complete their tax returns, but what should they do if their tax preparer makes a mistake that costs them money? The latest tax preparation software is designed to identify errors and ensure that taxpayers claim all of the deductions they are entitled to, but it is not perfect and can only process the information it is given. When the Internal Revenue Service discovers discrepancies in tax returns, it expects any unpaid taxes to be paid in a timely manner. The agency may also assess fees and penalties even if the error was an innocent mistake.


The IRS position on tax preparer misconduct is clear. Individuals are responsible for the information on their tax returns, and they are expected to pay any taxes due plus and fees or penalties that may be assessed. When a mistake is intentional, the matter is taken very seriously by both the IRS and the Department of Justice. Tax preparers that submit fraudulent returns can be charged with white-collar crimes, and their clients could also face fraud charges if investigators discover evidence of collusion.

Innocent mistakes

When tax return errors are caused by innocent mistakes, the IRS will pursue the taxpayer and not the tax preparer for payment. Tax preparers may contact the IRS to explain their mistakes and ask the agency to take a more lenient approach, or they could offer to compensate their clients directly. When tax preparers do neither of these things, taxpayers may pursue legal remedies by filing lawsuits.

Lax oversight

Tax preparers are subject to very lax oversight, which is one of the reasons why tax return mistakes are so common. The IRS expects taxpayers to pay what they owe and rarely takes action against tax preparers unless fraud is suspected, so it is always a good idea to check cr4edentials and think carefully before choosing an accountant or tax preparation service.