What to Do If Your Tax Preparer Didn’t File Your Return
Learn how to address issues with a tax preparer who didn't file your return, including steps to resolve and prevent future problems.
Tax season can be stressful, and hiring a professional tax preparer is meant to alleviate that burden. However, if the preparer fails to file your return, it can lead to complications, including IRS penalties and interest.
Signs of a Non-Filing Tax Preparer
Identifying a non-filing tax preparer can be challenging, but certain red flags can alert you to potential issues. A lack of communication is a significant warning sign. A reputable tax preparer should provide regular updates on your return’s status. If you are repeatedly reaching out without receiving timely responses, this could indicate a problem. Be cautious of preparers who refuse to provide a copy of your completed return or the IRS e-file confirmation, as these documents serve as proof that your return was filed.
Another major indicator is the preparer’s reluctance to sign the return. Paid preparers are required by IRS regulations to sign the return and include their Preparer Tax Identification Number (PTIN). Avoid preparers who sidestep this responsibility. Additionally, requesting payment in cash without providing a receipt is unprofessional and a potential red flag. Legitimate preparers typically offer multiple payment options and provide proper documentation for their services.
Steps if Your Return Wasn’t Filed
If you discover your tax return wasn’t filed, addressing the issue quickly is essential. Start by confirming with your tax preparer if the return was submitted. Miscommunications can sometimes cause misunderstandings. If it’s clear the return wasn’t filed, request a copy of the prepared return. This document is crucial for your next steps.
Once you have the prepared return, file it yourself as soon as possible, either electronically or by mailing a paper return to the IRS. Filing promptly can help minimize penalties and interest. The IRS imposes a failure-to-file penalty of 5% of unpaid taxes per month, up to a maximum of 25%. If there was reasonable cause for the delay, you can file Form 843 to request an abatement of penalties.
Additionally, evaluate your financial situation to understand any immediate tax liabilities or adjustments needed for estimated payments. Consulting a new, reputable tax professional can help you navigate any complexities, such as amended returns or prior discrepancies.
Communicating with the IRS
Engaging with the IRS can feel daunting, but clear communication is key to resolving issues. Gather all relevant documentation, including the prepared return and any correspondence with your tax preparer, to explain your situation effectively.
Contact the IRS using their official helpline at 1-800-829-1040 or visit a local Taxpayer Assistance Center if needed. Have your Social Security Number or Taxpayer Identification Number ready for verification. Be concise and factual when explaining the delay in filing. If penalties are involved, inquire about penalty abatement options, especially if you can demonstrate reasonable cause. For those unable to pay their tax liability in full, the IRS may allow payment plans.
Potential Penalties and Interest
Unfiled tax returns can lead to significant penalties and interest charges. The failure-to-pay penalty is typically 0.5% of the unpaid taxes per month, capping at 25%. This is on top of the failure-to-file penalty, which can compound the financial burden.
Interest on unpaid taxes accrues daily from the return’s due date until the balance is paid. The interest rate is the federal short-term rate plus 3%, compounding over time. Addressing unpaid liabilities promptly is critical to minimizing these costs.
Filing a Complaint Against the Preparer
If your tax preparer was negligent or uncooperative, filing a formal complaint with the IRS is an important step. Use Form 14157, Complaint: Tax Return Preparer, to report misconduct. Provide supporting documentation, such as emails or receipts, to substantiate your claims.
Filing a complaint helps protect others and ensures integrity within the tax preparation industry. The IRS may investigate and take disciplinary action against the preparer, such as fines or suspension of their PTIN. If the preparer’s actions caused significant financial harm, you may also pursue legal action through civil courts to seek restitution.
Choosing a Reliable Tax Preparer
Selecting a trustworthy tax preparer is crucial for accurate and timely tax filings. Look for professionals with proper credentials, such as Certified Public Accountants (CPAs), Enrolled Agents (EAs), or tax attorneys, and verify their PTIN. Research their reputation through online reviews, the Better Business Bureau, or state boards.
During initial consultations, assess their willingness to answer questions and explain their processes. Reliable preparers provide clear fee structures upfront and are transparent about their approach to handling audits or IRS inquiries. Building a strong rapport with a qualified preparer can ensure consistent and effective tax management in the future.