Call Kurtis Investigates: What Happens When My Tax Preparer Makes A Mistake?
NORTH HIGHLANDS (CBS13) — Retired electrician John Harris hired H&R Block to do his taxes last season and even paid extra for their Peace of Mind Extended Service Plan.
He says, they made a costly mistake and refused to step up and cover the cost.
"H&R made a mistake," said Harris."
Instead of $1,000 back, he learned he owed the Internal Revenue Service $6,400.
Harris paid H&R Block $40 for its Peace of Mind Extended Service Plan. It claims if you owe additional taxes as a result of an error in tax preparation, H&R Block will pay you for such taxes up to a cumulative total of $5,500.
When Harris brought the mistake to H&R Block's attention, the company denied his claim saying, "Your return was prepared correctly based on the information you provided to us during tax preparation."
Harris was not buying it: "I'm just left holding the bag."
We brought his return to tax attorney Betty Williams she quickly spotted the mistake on line 46, "You'll see that it's blank."
Williams says it was information the tax preparer forgot to carry over from another page.
She says some tax preparers will cover penalties or interest or fees accrued over their mistakes, but ultimately you will owe the largest amount of the actual tax portion due.
We asked Williams if H&R Block's Peace of Mind Extended Service Plan should cover the $5,500.
She says, "Based on the terms of their contract, I think H&R Block absolutely should pay this."
After we got involved H&R Block contacted Harris to resolve the issue, they offered to cover the cost of the preparer's mistake.
H&R Block told us, "It takes this matter seriously, and we apologize for the inconvenience this may have caused."
As for Harris, this was his first time using a tax preparer, and he says it is his last, "I expected it to be right, and it wasn't."
Remember you are on the hook for taxes, even if a professional makes a mistake. The fact is, you do owe that money.
Before hiring someone, ask him or her to spell out what happens if they make a mistake. Some preparers carry special insurance, to cover mistakes; like fees, penalties or interest based on the error made.