What are the Biggest Tax Preparer Mistakes?

What are the Biggest Tax Preparer Mistakes?

By Tim Frye

There may be no more worse industry to make a mistake in then the field of tax preparation. The reason for this is you are going to be held responsible for seriously drastic hardships when you cause delays to your client’s return, or make a mistake that creates an additional financial strain on the taxpayer. Taxes are already painful enough to pay every year, don’t make it more difficult for the taxpayer by compounding their issues. It is so crucial to take your time and be accurate when filing a person’s return, because every turn of the page, and every punch of the keyboard, you have the potential to butcher a person’s life in half, and subsequently ruin your tax season entirely. Lets evaluate the two biggest mistakes you could make as a tax preparer and help you avoid these potential catastrophic missteps.


Should I Promise a Tax Refund on an Exact Date?

One thing you really do not want to do is tell your client that there refund will be delivered on an exact day, whether the method of delivery be by mail or direct deposit, or you are having their payment for you service taken from the refund and the check is being printed out at your office. If you tell them a specified date, they will expect it that day, and when it doesn’t come, they will have extra reason to be infuriated. Once the refund has been electronically sent and accepted, the situation is technically out of hands. What if that person owes child support and that causes unexpected delay? What if the IRS is backed up due to the delay caused from the late resolutions of the fiscal cliff provisions that occurred at the beginning of this tax season? You never know what will happen once the IRS receives the return, and believe us at Pronto, they are not always that eager to refund your client his or her money. They will, however, have no problem kicking your door down and put your client into a horrific state mentally in no time at all if they are owed money. Remain Assured, if the IRS is owed, they will collect. So our general advice is to tell the client the refund will be arriving within a range of days. Stick to that method and you may just escape tax season without a verbal barrage spiced with vitriol as you watch your previously favorite client transmogrify into your worst enemy.

Entering the Wrong Direct Deposit Number

Wow. I can tell you first hand how the slippery slope can become an avalanche when it comes to this debacle. Let us just assume your in your groove, chopping it up with your client, things are going great, and now your just wrapping it up and punching in the direct deposit number for their refund delivery method. This may seem like an easy feat to accomplish. However, if you are distracted because you are simultaneously answering tax summary questions as you enter the information into the system, you can easily fat finger the numbers. Here is what will ensue following that tiny little mishap. The IRS will kindly deposit the refund into a non-existent account, and it will consequently sent back to the IRS. Ouch. Then guess what. The IRS, when they finally receive the funds back from the vaporous account, and they won’t allow you to have changed and corrected the number. They will just snail mail it out, which can take up to six weeks. So you originally promised the taxpayer a fast return of the refund of two weeks max. That rapid refund has just turned into a slow one, with a minimum wait of a month and half, and up to two and half months if your extremely unlucky. To avoid this nightmarish hardship, be sure to double and triple check your client’s direct deposit numbers before you finalize the return and send it out.

How to Avoid Tax Preparer Mistakes

Tax preparation, in many cases, is simply the art of entering data in it’s most accurate and efficient format. The only difference with this data entry is that if this information is not entered EXACTLY the way it needs to be, it will be processed incorrectly and further delays will ensue. In other words, unless you have something else to offer your client, like cleaning out their garage for slave wages, you will lose their business. And they will possibly go out and purchase the latest voodoo seminar and proceed accordingly. Don’t be that guy.