What Do I Do If There Is a Serious Error on My Return and I Get Audited? -One

What Do I Do If There Is a Serious Error on My Return and I Get Audited? So the first thing that you do is if there's a serious error on the return you need to get an attorney not a CPA not a tax preparer not your brother you need an attorney the reason you need an attorney is a serious error on the return carries potential criminal liability and or at least what we call a civil fraud penalty so you need an attorney to be able to communicate the full extent of the error and you need an attorney because an attorney is communication is protected under attorney-client privilege so you don't have that same relationship with your CPA or with another tax preparer number two is once you identify the error determine whether or not the auditor is going to catch it so if the air is fairly obvious then you're better off if mitting it to the auditor and avoiding the willfulness penalties or avoiding the impression that there's any fraud so a lot of the times when we have significant underreporting on a tax return we'll have a client who left off several hundred thousand dollars in income in a particular year will come out at the beginning of the audit will state that we have we have discovered an error will state that.

We accept the responsibility for it and that really will that our focus is getting to the correct amount of tax due paying that tax and moving on by doing that by accepting responsibility by acknowledging the error and by moving on the auditor is less likely to penalize you forty seventy five percent of the amount and they're more likely to be lenient why are they more, because you come out and make your job easier you know essentially Arkell walking into an auto particularly in honor that as a serious error is to do the work for the auditor so the auditor only has to do is just check our work and rubber-stamping remember an IRS audit is simply a check of the taxes so if we go through and we ferret out all those large errors we handed to the auditor on a silver spoon a silver platter and the all the auditor has to do is sign off on it then they're less likely to try and penalize. The client because that we've taken a step to make things more efficient for the government it doesn't eliminate the conduct but it helps to minimize it so if you've got a serious error on the tax return consult with an attorney and then develop a strategy for how you're gonna present to the auditor if you are going to present to the auditor and then go from there and then oftentimes having an attorney or somebody knowledgeable of the tax procedure and the way autos work will help you guide through that issue and get you out of there with us little liability as possible.


Sam Brotman, JD, LLM, MBA

Owner and Director of Legal
Brotman Law