Tax Preparer Made a Mistake? An Owner’s Next Steps
Tax return review for business owners and real estate owners.
What to check first
If you think your tax preparer made a mistake on a business or rental return, get the filed return and supporting records, identify the exact discrepancy, and request a written explanation. The next step depends on whether the issue is an incorrect return, a payment posting problem, missing information or a reasonable tax position.
By AE Tax Advisors Team · Published
Describe the difference before assigning fault
“My refund is smaller” does not identify an error. “The rental ledger shows $12,000 of repairs, but the return workpaper shows $21,000 and I cannot reconcile the difference” is a reviewable question. State the tax year, entity, property, return schedule, disputed amount and source document. Ask the preparer to show the reconciliation and explain any adjustment.
An owner may have provided an incomplete ledger. A bookkeeper may have duplicated a transaction. A preparer may have entered a figure incorrectly. The return may also reflect a limitation or election that was not explained clearly. These are different problems. A second advisor should establish what happened before describing the return as wrong or promising a refund.
Build a small evidence packet
- The complete filed federal and state returns, including schedules and filing acknowledgments.
- The source record that conflicts with the return and the version originally supplied to the preparer.
- Relevant bookkeeping adjustments, depreciation schedules, basis worksheets and carryforward records.
- Any IRS or state notice, including its response date and envelope.
- The engagement letter and messages discussing the disputed item.
Use a secure document portal. Preserve original files and put proposed corrections in a separate copy. Record which return version was actually filed; a draft containing the right number does not establish what the taxing authority received.
Example: the same expense appears twice
Suppose a practice owner sees a $4,800 software purchase in both the credit-card expense report and a bank payment category. That is a hypothetical bookkeeping warning, not proof that the filed return deducted $9,600. The accountant may already have removed the duplicate in a year-end adjustment. Request the adjusted trial balance and the expense total used on the return. If the duplicate survived, quantify the correction and identify every affected filing.
Ask for a correction map
A useful response lists the established facts, unresolved questions, affected years, proposed procedure, expected tax direction and who is responsible for each step. Individual amended returns, entity corrections, payment tracing and accounting-method corrections are different procedures. For partnerships, the applicable correction process can depend on the partnership’s filing regime. Do not submit an individual amendment before understanding whether an entity-level correction is required.
The IRS explains that taxpayers remain responsible for return accuracy even when they hire a preparer. That does not answer who should bear preparation costs or whether a preparer has contractual responsibility. Discuss fees separately from the action needed to protect a response or filing deadline. Keep notices moving while the parties resolve responsibility.
When a second opinion helps
Seek an independent review if the numerical explanation is still missing, several years may be affected, or the advisor cannot explain the proposed procedure. Request a defined review scope and written findings. An ordinary mistake is different from suspected unauthorized changes or misconduct; describe the evidence accurately. Start with a business return lookback review and use the mistake library to identify the specific issue.
Sources and scope
Sources checked September 26, 2026. Examples are hypothetical. This educational guide does not determine whether your return is incorrect or which filing procedure applies. Editorial policy.
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