If your tax preparer makes a mistake, who pays?

When a tax preparer makes a mistake, the IRS generally looks to you for the tax, and usually for any penalties and interest too. That can feel unfair, but it’s how the IRS approaches it. You may be able to get some penalties removed if you relied reasonably on a competent preparer. Whether you can get money back from the preparer is a separate question, answered by your agreement with them and your state’s law.

This guide explains how those pieces fit together: the tax, the penalties, the interest, the preparer’s own penalties, and your options with the preparer. For the first practical steps, see Your accountant made a mistake: what to do next.

Who the IRS holds responsible

The IRS says it plainly: you’re “generally responsible for complying with tax law even if someone else handles your taxes.” It adds that you should know what your tax preparer files and get proof that your return or payment was sent on time (IRS, Penalty relief for reasonable cause).

The IRS also warns about preparers who “disappear after filing, leaving you responsible for penalties, interest, or audits” (IRS, Tax return preparer misconduct). In practice, that means:

• IRS notices about the return come to you, not the preparer;
• the balance the IRS says is due is billed to you;
• the deadlines in those notices apply to you, even while you’re sorting things out with the preparer.

So the first job is usually to deal with the IRS, and only then to work out what the preparer owes you.

The tax itself

If a mistake means your return showed too little tax, the correct tax is still owed. If it showed too much, you may be owed a refund. Either way, the fix usually starts with correcting the return.

The IRS explains how to file an amended return. It also says that, generally, to claim a refund you must file the amended return within 3 years after the date you filed the original return or 2 years after the date you paid the tax, whichever is later (IRS, File an amended return). If a preparer’s mistake cost you a refund and that window is closing, move quickly.

Whether the extra tax itself counts as a loss the preparer should cover is a different question. An attorney will usually ask how the tax would have come out if the return had been done correctly from the start.

Penalties, and when the IRS may remove them

Common penalties after a preparer’s mistake

• Accuracy-related penalty. This may apply if you underpay the tax required on your return, for example through negligence or a substantial understatement of tax. The IRS gives examples of negligence, such as leaving out income that was reported on a Form 1099 (IRS, Accuracy-related penalty).
• Failure-to-file penalty. This applies if a return isn’t filed by its due date, including extensions. The IRS says it doesn’t apply if you can show the failure was due to reasonable cause (IRS, Failure to file penalty).

Relying on a preparer can count, with conditions

Federal law says no accuracy-related penalty applies to a portion of an underpayment if there was reasonable cause for it and you acted in good faith (26 U.S.C. § 6664(c)(1)). Relying on a professional can be part of that, but it isn’t automatic. The regulation says reliance on the advice of a professional tax advisor “does not necessarily demonstrate reasonable cause and good faith,” but it does if, under all the circumstances, the reliance was reasonable and made in good faith (26 C.F.R. § 1.6664-4).

When you relied on a tax advisor, the IRS says it may consider:

• whether you gave the advisor all the information they needed;
• whether the advisor was competent and experienced with your tax situation.

It also looks at your own efforts to report the correct tax, how complex the issue was, and your education and experience (IRS, Penalty relief for reasonable cause). A different kind of relief, first-time abatement, can apply to some penalties based on a clean compliance history rather than a reason (IRS, Administrative penalty relief).

Keep copies of what you gave the preparer and what they told you. That paper trail matters both for penalty relief and for any later dispute with the preparer.

Interest is harder to remove

The IRS charges interest when tax, penalties or interest aren’t paid by their due date (IRS, Interest on underpayments and overpayments). On that page, the IRS explains:

• if the tax or penalties you owe are reduced, it automatically reduces the related interest;
• it doesn’t remove or reduce interest for reasonable cause or as first-time relief;
• it may reduce interest only if the interest is applied because of an unreasonable error or delay by an IRS officer or employee.

So a preparer’s mistake alone generally won’t get interest removed by the IRS. It’s a cost worth raising with the preparer, and with an attorney if you consult one. Paying what you can, when you can, keeps it from growing.

The preparer can be penalized too, but that doesn’t pay your bill

Federal law has penalties for paid preparers. A preparer can owe a penalty for each return or refund claim where part of an understatement comes from a position the preparer knew or reasonably should have known about and that doesn’t meet the law’s standards, and a larger one where the understatement comes from willful or reckless conduct (26 U.S.C. § 6694). Those penalties are owed to the government. They don’t reduce what you owe or come to you.

The IRS also investigates preparer misconduct that you report on Form 14157, and has a separate affidavit, Form 14157-A, for some cases where a preparer changed a return or diverted a refund without your consent (IRS, Tax return preparer misconduct). Reporting is worthwhile when something went wrong, but it runs separately from your own costs.

Getting costs back from the preparer

There are two routes, and they can be used one after the other.

1. What the preparer agreed to

Read the engagement letter or the service terms you accepted. Look for:

• any promise to pay penalties or interest caused by the preparer’s own error, and what it covers;
• a time limit or a claim process for asking;
• whether disputes go to arbitration instead of court.

Ask in writing, attach the IRS notice, and keep a copy. A clear written request and response help whatever happens next.

2. A legal claim

If the preparer won’t cover the costs and the mistake caused a real loss, a claim for accounting malpractice or breach of contract may be possible. Whether it is depends on your state’s law and the facts, and those claims have short time limits. In Florida, for example, a professional malpractice claim other than medical malpractice generally must be brought within two years from when it is discovered or should have been discovered (Fla. Stat. § 95.11(5)(b)). Our guide Can you sue your tax preparer or accountant? explains how these claims generally work and who can bring one.

A short checklist

1. Respond to every IRS or state notice by its date. Don’t wait for the preparer.
2. Get your records back. Federal rules require practitioners to return client records you need for your federal tax obligations when you ask (31 C.F.R. § 10.28).
3. Have the return corrected, by the original preparer or someone independent.
4. Ask the IRS about penalty relief, with the facts about what you gave the preparer.
5. Pay what you can to limit interest.
6. Ask the preparer, in writing, what they will cover.
7. Write down the dates: when the return was filed, when you learned of the mistake, and every notice.
8. If the costs are significant, talk with an attorney licensed in your state about the time limits that apply. You can also read our guide to tax preparation errors, or learn how our service works.

Sources and corrections

We wrote this guide from the primary sources below and checked it against them on September 27, 2026.

• IRS, Penalty relief for reasonable cause: the taxpayer’s responsibility, and factors when you relied on a tax advisor
• IRS, Tax return preparer misconduct: preparers who leave clients responsible for penalties and interest; Forms 14157 and 14157-A
• IRS, File an amended return: time limit to claim a refund
• IRS, Accuracy-related penalty: when it applies, and examples of negligence
• IRS, Failure to file penalty: when it applies, and reasonable cause
• 26 U.S.C. § 6664(c): reasonable cause exception for accuracy-related penalties
• 26 C.F.R. § 1.6664-4: reliance on a professional tax advisor
• IRS, Administrative penalty relief: first-time abatement
• IRS, Interest on underpayments and overpayments: when interest is and isn’t reduced
• 26 U.S.C. § 6694: penalties on tax return preparers
• Fla. Stat. § 95.11(5)(b): Florida professional malpractice time limit
• 31 C.F.R. § 10.28: return of client records

We are not attorneys, and this guide is not legal advice. Laws change and differ from state to state. If anything here is out of date or wrong, email support@malpracticeattorneys.com with the page name, and we’ll review it and update the page.