Dorothy Philbin | CNBNews
First: If you choose/have chosen a paid tax preparer, pick a good one and not just the most convenient one. About 20 years ago (give or take) one of the nation-wide tax preparing companies had an 80% error rate on itemized returns. As a result the IRS now requires all paid preparers to be certified. If you are paying someone to prepare your taxes, make sure s/he is certified.
If you happen to choose someone who has a record of errors (innocent or not) with the IRS, expect an audit. This is not a certainty but the odds are favorable that, if you itemize your deductions, you will hear from the tax man.
Who pays the penalty? That depends. If the paid preparer can prove that s/he filed an accurate return based on the information you supplied, you pay. If the mistake was made by the preparer, s/he pays. That only applies to the penalty – you pay the interest.
Second: If you are called for an in-office audit, prepare yourself. You have the right to bring a representative with you. With paid preparers, that can be a problem as once tax season ends they sometimes disappear into the wind. Know what you are talking about when the auditor asks questions. Don’t go into the audit with an attitude. It won’t help. An auditor has the authority to lessen or alleviate penalties so you want to keep on his good side. Don’t be afraid to try to negotiate with the auditor. This is another reason to stay on the auditor’s good side. You have everything to gain and nothing to lose.
Last: No one, NO ONE, has the authority to negotiate interest. You’re stuck on that hook.
Again: Good luck and here’s hoping for a quick refund.