A Garland resident’s nightmare after her tax preparer made a huge mistake on her return serves as a stark reminder that if the Internal Revenue Service finds a problem with a return, ultimately the taxpayer is the only one responsible.
Retired teacher Lee Ann Abbott learned that lesson the hard way. She always had her taxes prepared professionally, and 2013 was no different.
“I’ve always had a preparer to do it for me. I’ve never done it by myself because I want to make sure I’m doing it the right way,” Abbott said.
For 2013, she went to a local Jackson Hewitt office in Garland. But several months later, she got a letter that would strike fear in the heart of any taxpayer.
“I received a letter from the IRS saying there was a mistake. They had found it, and I was going to owe a lot of money,” said Abbott.
The IRS outlined the problems in the letter. It said Abbott’s retirement income was nearly $39,000.
Her preparer typed in just $39. And the preparer completely forgot to list her social security as income. The IRS letter said she owed $8,923, which shocked her.
“I was standing right here going, ‘Oh my gosh! Oh my gosh! Oh my gosh.’”
Abbott said she repeatedly questioned the preparer because she got a $5,000 refund and typically owes money, but the preparer assured Abbott the return was correct.
“I said, ‘Are you sure?’ And she said, ‘Yes ma’am, because you’ve had a lot of medical,’ which I have had the last two years,” said Abbott.
So Abbott used her refund money to remodel her kitchen and didn’t think about it until months later when she got that frightful letter. That’s when she returned to the Jackson Hewitt office in Garland.
“I walked in and I said, ‘We have a big problem here.’”
Within minutes she said the person she spoke with spotted the mistakes.
“They said, ‘We made these mistakes here.’ I said then, ‘Why aren’t you taking care of this? Your sign right behind you says guaranteed 100 percent,’” said Abbott.
Jackson Hewitt promises 100-percent accuracy. But the small print said, “If we make an error preparing your return, we will cover penalties and interest.”
In an email to Abbott, Jackson Hewitt promised to pay $1,661 to cover that, but Abbott would be left to pay about $7,000 in back taxes. The IRS would continue to charge penalties and interest until Abbott paid off the debt.
“It’s going to take me a couple of years, probably, to pay this off,” Abbott said.
So Abbott called the NBC 5 Investigates Consumer Unit and we contacted Jackson Hewitt.
In an email to NBC 5, Mark Steber, Jackson Hewitt’s chief tax officer, wrote: “Jackson regrets the mistake in Ms. Abbott’s 2013 tax return and apologizes for the inconvenience it has caused her.”
Steber went on to write, “The tax professional who prepared Ms. Abbott’s tax return for the 2013 tax season made an error in data entry. She entered the wrong income amount and this error was not corrected before submitting the tax return to the IRS. This is an extremely rare mistake and due to human error.”
He also said each preparer who works for Jackson Hewitt receives mandatory training and testing.
In the end, Jackson Hewitt offered to pay Abbott’s penalties and interest as well as pay back that erroneous $5,000 refund. All she had to pay was the amount she would have owed if her taxes had been done correctly.
Steber also said the preparer who did Abbott’s return will not be back this tax season.
“Ultimately, under the law, the taxpayer is responsible for their tax return,” said Clay Sanford, a spokesman with the IRS.
So if there’s a mistake, the taxpayer bears the burden to pay for it. In fact, on the return, taxpayers sign a statement confirming that all the information is true and correct.
Sanford stressed most tax preparers do good, honest work, but you need to take care choosing one.
“I would just encourage people to check for the experience. Check for references before you choose a preparer,” Sanford said.
Ask for a preparer’s qualifications, including his preparer identification number. Verify the preparer has completed at least the minimum IRS-mandated hours of training. The IRS provides a directory of preparers of varying skill levels as well as information about the type of preparers.
You can also report a bad preparer to the IRS.
And before any returned is signed and sent to the IRS, Sanford said it’s imperative that a taxpayer review it.
Abbott said she’s relieved in the outcome of her situation, but she’ll now approach tax time differently. And she hopes others will, too.
“Please, be careful,” Abbott said. “Ask questions.”