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Understanding the legal guidelines surrounding federal tax preparation can help you to avoid fraud and help you avoid being audited unnecessarily. Here is a list of 8 tips you should know about federal tax preparation.
- Individuals are legally responsible for their own tax return even if it is prepared by someone else.
- A paid tax preparer is required by law to sign the return.
- According to the Internal Revenue Service (IRS), tax preparers are not to charge for federal tax preparation based on a percentage of your tax return.
- Make sure you sign your return before you file. Clarify anything you do not understand on the form with your tax preparer before you sign.
- Make sure that you review all information for accuracy, especially the spelling of your name and your social security number.
- If you notice a mistake on your prepared federal tax return, you can make changes by filing a 1040X. You have three years after filing to correct your return with this form.
- Be sure to keep all receipts and other documents and forms that were used in preparing your tax return. The IRS has three years to audit a return. They can audit you without limitation if you do not file, file a false return, or purposely avoid paying taxes.
- If you are late paying taxes due (after April 15th) you will owe the IRS interest and fees even if you file for an extension.
