What is the name of your state (only U.S. law)? DE
If a paid preparer makes an improper filing based on incorrect information from the taxpayer and then becomes aware of the mistake, does the preparer have any responsibility to amend the return or advise the IRS? I was once told by a paid preparer that if/once they became aware of a wrongful filing, they have to report it to the IRS, whether or not the taxpayer wants them to. In this particular case, the preparer deducted a portion of mortgage interest on a married -separate return for the spouse A because she was told that the mortgage loan was in the name of both spouses. However, the loan was only in the name of spouse B. According to IRS rules, spouse A can not deduct any mortgage interest even if spouse B gives permission. When the preparer found out that spouse A was not on the loan, she immediately notified the IRS to "protect her license". I thought the taxpayer was the only one responsible for the return, period.
If a paid preparer makes an improper filing based on incorrect information from the taxpayer and then becomes aware of the mistake, does the preparer have any responsibility to amend the return or advise the IRS? I was once told by a paid preparer that if/once they became aware of a wrongful filing, they have to report it to the IRS, whether or not the taxpayer wants them to. In this particular case, the preparer deducted a portion of mortgage interest on a married -separate return for the spouse A because she was told that the mortgage loan was in the name of both spouses. However, the loan was only in the name of spouse B. According to IRS rules, spouse A can not deduct any mortgage interest even if spouse B gives permission. When the preparer found out that spouse A was not on the loan, she immediately notified the IRS to "protect her license". I thought the taxpayer was the only one responsible for the return, period.