FINANCIAL FOCUS Have You Had Your Tax Returns
Reviewed Lately? By Tina Triano, Esq.
O
ne of the largest areas of my law practice is tax preparation and tax
return review. Let’s face it, tax preparers are not created equal and that is the reason why the more taxable income that you have, the more important it is for you to have your tax returns reviewed for accuracy and missed opportunities. This isn’t because your tax returns were completely incorrect. Usually the problems start with income reported incorrectly, and end with lost tax deductions as a result of lack of communication with your tax preparer without either of you knowing about it. Tax organizer packets that are provided to taxpayers do not always ask all of the questions that lead to a correctly prepared return and because you aren’t a tax preparer, there is no way that you could possibly know all of the tax deductions that are actually available to you. There are also tax pre- parers who aren’t familiar with all of the tax deductions available to you and they rely on software programs for their cal- culations. But if you haven’t been asked all of the questions you need to be asked, or if the tax organizer packet is incom- plete, it will result in a tax return that no one knows is incomplete. Tax preparation software programs
can have their own problems, which I have personally encountered in my law practice. Software programs are created by software engineers for the majority
BY SYLVIAMYRVOLD
of the taxpaying population, but maybe there is something about your income or your tax deductions that doesn’t fit the majority of the taxpayer population. This is where unintentional oversights begin. Additionally, reporting of specific types of income can be an issue, such as notary income or trust income, and if your tax preparer is unfamiliar with the revenue rulings, which are not part of a software program, then your return will be prepared to the benefit of the IRS. Typically, after a personal interview,
I take on new tax clients after review- ing two to three years of past tax returns and finding discrepancies. One
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of my tax clients had his return prepared by a popular tax preparation company using one of the leading software pro- grams, however, the calcula- tions that were imbedded in the software to calculate Form 6251, calculation of Alternative Minimum Tax, resulted in a $15,000 error in the IRS’s favor. The next problem becomes that tax preparers rely so heavily on the accuracy of the software programs that they don’t always conduct an actual review of the return with their own eyes. This is where I come in. I review tax returns by hand, page by page. Because I have reviewed thou- sands of returns for more than twenty years, there are specific discrepancies that jump off the pages for me. In this particular case, I knew that the 6251 cal- culations were inherently
wrong because I knew what the client’s tax deductions should have been. After confirming the information with Internal Revenue Code (not the prepa- ration book), I prepared a new return for the client and he received an addi- tional $15,000 return. Recently I completed return reviews
for two additional clients. I reviewed three years of past tax returns and found over $40,000 in refunds spanning the three years for both of the clients. These errors were clearly miscommuni- cations with their tax preparers. It was not due to tax preparation error.
~ Continued on page 16 Out & About • April 2012 15
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