CFA: Tax Preparation Problems

EAST PROVIDENCE, R.I. (WPRI) - If you pay a tax preparer to take care of your taxes this year, and they make a mistake, who's ultimately responsible?

The answer may surprise you - you are.

Call 12 For Action received several complaints from Rhode Islanders this tax season on this topic.

Problem Solver Susan Hogan talked to one local family who are struggling to make ends meet, and may be missing out on a refund because of a mistake their tax preparer made.

Nicole and Brian Sampson paid a preparer $250 to do their taxes, but the preparer failed to send an important document to the IRS.

"They're the tax professionals, I put my faith in them to do their job," Nicole said.

Now the Sampsons may be losing out on a $7,000 refund.

The IRS says that document was never filed, and officials tell Eyewitness News that the taxpayer is ultimately responsible for catching any and all mistakes on your return - even if you've paid a professional to take care of it.

"Even though they sign it, it doesn't mean they are responsible," IRS spokeswoman Peggy Reily said.  "Once you sign it you are responsible for everything they put on there."

However, some tax preparers offer insurance on tax prep work that will pay for any mistakes that might get made.

The trick is to be careful and do your homework when picking a tax preparer.  Make sure they're registered with the state and have an ID number; that ensures they definitely know the tax codes.

The IRS has a tax competency exam that licensed tax preparers must pass by 2013, otherwise they lose their registration with the state.

As for the Sampsons, the IRS says they can still file that paperwork and should still get their refund - it will probably just take a couple of months.