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They did what?!? Top 10 mistakes
made by professional tax preparers
By Kay
Bell • Bankrate.com
A big deal is made every tax season about the
silly mistakes taxpayers make when filing their returns. But don't
take it personally. You're not alone.
The Internal Revenue Service reveals that nobody's
perfect -- even paid preparers. The IRS has compiled a list of the
top 10 errors tax professionals made on returns the agency has received
through March 7.
The mistakes are shown for each of the three
individual return forms: 1040, 1040A and 1040EZ. Because some of
the recently processed returns are for the previous tax year, the
IRS found errors related to the confusing rate
reduction credit. The good news: That's not a problem on 2002
returns, since the 10 percent rate that the credit was created to
pay out is now fully integrated into the regular
income tax brackets.
As you can see in the lists below, many of the
mistakes are the same ones you and I tend to make. Millions of filers
who did their own taxes last year messed up the rate reduction credit
and so did paid tax professionals. Tax-mistake staples, like mismatched
names and Social Security numbers and miscalculated credits, also
made the lists.
Form
1040
- The taxpayer was eligible for the rate reduction
credit, but did not claim it.
- Taxpayer identification numbers or names
for dependents used in a claim for exemptions didn't match IRS
or Social Security Administration records.
- Taxpayer identification numbers or names
for dependents used in a claim for the child tax credit didn't
match IRS or Social Security records.
- Earned income credit was figured or entered
incorrectly.
- Social Security number for children used
to claim the earned income credit didn't match Social Security
records.
- Children were too old to be claimed as part
of the child tax credit.
- The additional child tax credit was figured
incorrectly.
- The rate reduction credit was improperly
claimed. The taxpayer had already received the maximum rebate
check or didn't have taxable income and so was not eligible for
the credit.
- The amount of tax due was calculated using
an incorrect filing status.
- Spouse's Social
Security number was missing or didn't match Social Security records.
The corresponding exemption was not allowed.
Form
1040A
- Taxpayer identification numbers or names
for dependents used in a claim for exemptions didn't match IRS
or Social Security Administration records.
- Taxpayer identification numbers or names
for dependents used in a claim for the child tax credit didn't
match IRS or Social Security Administration records.
- Earned income credit was figured incorrectly.
- Social Security number for children used
to claim the earned income credit didn't match Social Security
records. The amount of the credit was changed.
- The taxpayer was eligible for the rate reduction
credit, but did not claim it.
- The additional child tax credit was figured
incorrectly.
- Tax not figured correctly based on filing
status information reported.
- Children were too old to be claimed as part
of the child tax credit. The credit
was reduced or disallowed.
- Correct form to claim the earned income credit
was not filed so credit was disallowed.
- Taxpayer's Social Security number or name
did not match Social Security Administration records. The filer's
personal exemption and earned income credit amounts were disallowed.
Form
1040EZ
- The taxpayer was eligible for the rate reduction
credit, but did not claim it.
- Earned income credit was was not allowed
because the taxpayer did not meet the age requirements.
- The rate reduction credit was improperly
claimed. The taxpayer had already received the maximum rebate
check or didn't have taxable income and so was not eligible for
the credit.
- Taxpayer's Social Security number or name
did not match Social Security Administration records. The filer's
personal exemption was disallowed.
- The tax amount entered on the form was from
the wrong tax table.
- Taxpayer's Social Security number or name
did not match Social Security Administration records. The filer's
personal exemption and earned income credit amounts were disallowed.
- Spouse's Social
Security number was missing or didn't match Social Security records.
The corresponding exemption was disallowed.
- Earned income credit was figured or entered
incorrectly.
- Correct form to claim the earned income credit
was not filed so credit was disallowed.
- Refund amount or amount of tax owed was figured
incorrectly.
All of these mistakes were made by preparers
who submitted paper tax returns for clients. The IRS, eager to get
all of us -- individual and professional – to file electronically,
says that many of the errors could have been avoided if the agency's
e-file program was used.
And as you struggle with your return, hang in
there. The best of us -- and them -- are only human when it comes
to taxes!
-- Updated March 13, 2003
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