BE ON THE LOOKOUT FOR THESE ERRORS

Watch out for an error in the instructions for Forms 1099, 1098 and W-2G, and similar information returns. The correct due date for businesses to give a copy of the form to taxpayers is Feb. 17, 2009; not March 2 as the instructions state. The IRS can slap penalties on late issuers. The earlier date was OK’d by Congress in Oct.

NON CPA TAX PREPARERS CRITICISED

According to the Treasury Department, many returns done by unlicensed paid preparers are riddled with errors. Agents made undercover visits to 28 such preparers and found that 61% of the returns contained mistakes, and in a third of those cases, the preparers acted recklessly.

In one example the preparer added in deductions the taxpayer wasn’t entitled to, or claimed dependents erroneously. One of the problem preparers the Treasury visited prepared over 700 actual returns for taxpayers during the most recent filing season. This information gives legs to a bill forcing unlicensed preparers to register with IRS.

Preparers who aren’t CPAs, lawyers or enrolled agents will have to pass a test to do tax returns. As Senator Grassley once said, “it does not seem right that you have to have a license to cut hair, but do not need to have a license to do a tax return.”

We at Kopsa Otte know that this is true. We get to see a lot of returns when we do second opinions. Just this week we are amending a return prepared by an unlicensed preparer and the happy new client is getting refunds of over $3,000. If you are not a client of Kopsa Otte, and are interested in having us do a Second Opinion on your tax return, contact Amanda Hansen at ahansen@kopsaotte.com for details.