With advancements in tax software and technology, it’s rare to find tax returns that are filled out by hand; without the assistance of a tax preparer or tax preparation software. These advancements have given rise to a whole market of self-preparation software. The most popular is Turbo Tax, but there are others.
With the popularity of these self-preparation tools and software, have come the aftermath, the Internal Revenue Service (IRS) tax audit. I personally like self-preparation tax software tools, like Turbo Tax, because they have led to business for me in what IRS examiners refer to as a “Turbo Tax Audit”. The key with the do-it-yourself software is whether you, the tax preparer, know what you’re doing because you don’t get the professional representation you didn’t pay for.
The software is advertised as easy to use and typically uses question and answer formats. To prepare your tax return, you answer questions posed by the tax preparation software, and plug in your data, and then your taxes are done. When there is trouble, it’s usually rooted in whether the tax preparer (you), answered the questions correctly for the purposes of the tax return. Because the computer software doesn’t know you or your situation, this is where you need to have some knowledge of taxes in general to ensure that you’re not taken on a path that will lead you to an appointment with my office, and eventually the IRS.
The self-preparation software sometimes offers “audit protection.” However, be sure to read the fine print as to the limitations and conditions of such “protection” should you want it, as there may be circumstances where your audit “insurance” is not covered. And, you’re again in my office or facing the IRS alone.