Usually in my house, the television is dark. We turn it on to watch sports, and sometimes some primetime T.V. The other night I happened to see a commercial from a big tax chain that offered to double check your current return or past returns that you have filed. They said that they guaranteed they could find money that “you left on the table.” What they are going to do is amend your tax return and get you more money. What they don’t tell you is that doing that increases your chance for an audit.
When filing an original tax return by April 15th, typically that return, unless you are obviously doing something that that has no economic reality, isn’t really looked at by the tax man. Most returns are electronically filed and they are processed by the IRS’s computer system. These systems are designed to flag returns that need to be looked at. The fact is that 99 percent of returns that are filed are not examined. They are processed and refunds are issued or payments of taxes are made. Everyone is happy.
When you amend your return, the return itself is reviewed by the IRS. Amended returns cannot be e-filed. Theses returns are paper filed and are sent to a special processing facility where they are looked over by Revenue Agents before refunds are given. Typically, it can take eight to ten weeks for these returns to be processed.
Amending a return because you made a mistake, or didn’t claim some income items, is perfectly okay. However, if you are amending your return because there were some expenses that you didn’t take, then you have set yourself up for an examination of your records. I am not saying don’t amend a return, but what I am saying is make sure your original return is correct before you file.
Even if you hire a professional to file your return, you are ultimately responsible for what is on the return, so double check it. Ask questions. Make sure that all of your income and deductions have been accounted for. Never hire a “professional” that guarantees that they can get you money back. Unfortunately, tax preparers do not need to be licensed to prepare tax returns. If your return is examined, they cannot represent your interests before the Internal Revenue Service. Only an Enrolled Agent (EA), Certified Public Accountant (CPA), or an Attorney can represent you in an audit. These professionals are licensed, educated, and have to take continuing professional education each year to keep up with the changing tax code. Obviously, you are going to pay more to have a licensed professional prepare your return, but sometimes in life you get what you pay for. Price is important, but shouldn’t really be a factor when considering who should prepare your return.
Before your return is filed, check the names and Social Security numbers. If you got married and changed your name, but did not change it with the Social Security Administration, your return will be rejected by the IRS.
Remember that you are the one signing the return under penalties of perjury, so make sure that you double check everything that is on your return. Make sure that your tax preparer’s office is open year round so that if you have a question, or are getting examined, they will be there to help you.
For more information visit www.smalleynco.com
If you have any questions you can email Craig W. Smalley E.A.
Author of the books: It Starts With an Idea – Tax Tips for Small Businesses, The Ultimate Real Estate Investor Tax Guide, The Complete Guide to the New Tax Law – American Taxpayer Relief Act of 2012, Everything You Wanted to Know about the IRS – Audits, Appeals and Collections, Tax Avoidance is Legal! The Complete Guide to Individual Income Tax, The Complete Guide to the Affordable Care Act’s Tax Provisions, The Complete Guide to Retirement Plans for Small Businesses, The Complete Guide to Estate, Gift and Trust Taxation, The Complete Guide to Hiring an Accountant, The Complete Guide to Subchapter S-Corporations,, and Free Money. All available exclusively on Kindle
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