The laws that govern tax obligations in the United States are enough to make even the most seasoned of businessmen question their returns. Did they take advantage of all possible credits and deductions? Did they provide enough documentation to support the claims? Because of the complexity of these filings, many choose to use the help of a professional.
But does that shield the taxpayer from liability?
What if the professional you choose is not as professional as you thought? What if they make a mistake — either accidentally or intentionally?
Although the answers to these questions depend on the details of each individual situation, there are some general rules that hold true. The following will discuss these basic principles and provide some foundational knowledge to help navigate this type of situation.
How often does this happen?
Unfortunately, instances of unscrupulous actors who claim to be professionals when it comes to taxes only to bilk taxpayers are very common. In fact, the IRS lists this as one of their Dirty Dozen, or most common tax scams. Scammers will find which tax rules are most complicated and claim to be experts, stating they will guide business owners through the process and better ensure the make the most of their returns.
This year, scammers are taking advantage of the confusion that surrounds the Employee Retention Credit (ERC), a COVID-19 related tax credit meant to help business owners survive the harsh economic environment during and shortly after the pandemic. The IRS has recognized numerous marketers that claim to have experience in this area and promise to guide business owners through the process to get the credit. Unfortunately, these individuals are often either misguided or simply wrong in their application of the law. This has often left to situations where the business owner claims a tax credit even if they do not qualify.
What if I am the victim of this type of a scam?
There are options to help business owners who believe they filed in err under the guidance of one of these scammers. However, at the end of the day, each taxpayer is generally responsible for their own filings. This means that the Internal Revenue Service (IRS) will likely try to hold you personally liable for the filings even if a professional completed the taxes on your behalf.
Thankfully, you do not have to go through this process with the IRS on you own. You can seek legal counsel to help advocate for your interests when you find yourself in this difficult position. The attorneys at Goldburd McCone are experienced in these types of cases. They can review the details of your situation, discuss your options, and tailor a legal strategy to your case.