Complete Information Is Not Optional 

A tax return filed by a paid tax professional is only as accurate as the information provided. Taxpayers are responsible for disclosing all income and providing all relevant documents. 

That includes forms W-2 and 1099, schedules K-1, brokerage statements, and documentation supporting deductions and credits. It also includes life changes such as marriage, divorce, new dependents, and changes in custody. Self-employment income is omitted because it was never shared, so the return is still incorrect. The IRS will hold the taxpayer themselves accountable, not the tax preparer who never received the information. 

Set expectations early. The tax interview is a full-disclosure conversation, not just a document upload. 

Reviewing Before Signing 

Many clients mistakenly think that signing their tax return marks the final step in a process they haven't fully reviewed. This belief is incorrect, as signing the return signifies that clients confirm its accuracy. It is highly recommended that clients conduct a thorough review of their tax returns and direct any questions to Dynamic Tax Services. During this review, clients may uncover inconsistencies, such as typographical errors or other mistakes. Clients should focus on the following critical areas:

• Total Income

• Adjusted Gross Income

• Taxable Income

• Asserted Credits and Deductions

• Refund or Balance Due

It is important to clarify any unfamiliar figures before filing, rather than waiting for an IRS notice to arrive.

IRS Notices Do Not Go Away 

Another common issue is ignored mail. Many problems escalate because taxpayers fail to open or respond to IRS or state notices. Deadlines matter. Unpaid interest and penalties will continue to accrue; what begins as a small mismatch can grow quickly. 

Responsibility does not automatically shift to the tax preparer just because a notice is issued. Unless the taxpayer forwards the notice and specifically engages the tax preparer to respond, the issue remains solely theirs to handle. 

Please understand clearly: if you receive a notice, contact us immediately. 

"My Tax Preparer Did It"...This Is Not A Shield

Clients sometimes believe hiring a tax professional transfers liability. It does not. 

The IRS generally holds the taxpayer responsible for things such as underreported income, overstated deductions, and unpaid tax. Even if a tax preparer made an error, the taxpayer must still pay the tax and interest. Courts have also consistently held that the taxpayer cannot avoid liability for additional tax, penalties, or interest simply because a tax preparer made an error. 

When clients understand their responsibility, they are more engaged and more careful about the information they provide. This concept is what Dynamic Tax Services would like all tax clients to understand. We want to make sure the issue is never a matter of concern.

Recordkeeping Is Also The Taxpayer's Job

To verify items on a tax return, such as income, deductions, and credits, taxpayers must maintain adequate records. This requirement includes invoices, mileage logs, receipts, and other supporting documentation. Professionals at Dynamic Tax Services can offer guidance on what information to retain and how long to keep it as your tax preparer. However, it remains the taxpayer's sole responsibility to preserve those records.

When the IRS reviews a tax return, the taxpayer bears the burden of proof. Without proper documentation, deductions and credits may be denied, highlighting the necessity of maintaining accurate records to substantiate claims made on tax returns. Dynamic Tax Services encourages taxpayers to organize their recordkeeping throughout the year, rather than just at filing time, to ensure they can provide sufficient documentation for their deductions and credits during an IRS review.

A Stronger Client Relationship

Our partnership is the foundation of a successful tax engagement. We contribute our expertise and meticulousness. You, the taxpayer, provide complete information and appropriate documentation. It is important to recognize that the ultimate responsibility is to enhance compliance. Our responsibility is to provide guidance and preparation. Your responsibility as the client is to review documents, retain pertinent records, and disclose information.

Both Dynamic Tax Services and you, the client, are essential in guaranteeing the safety of all parties.

Summary

Our goal is to file an accurate return that stands up to scrutiny, ensuring you comply with the IRS wile protecting your interests. We hold Dynamic Tax Services firm to high standards of integrity, which means we must have complete documentation for every deduction we claim. The IRS has strengthened its due diligence requirements, and we are strengthening our processes to match. To work as a team and prevent the IRS from delaying your tax refund or sending inquiries, we need to ensure all required documentation is provided upfront. 

If further information is needed to confirm, please read the attached IRS documents:

TREASURY DEPARTMENT CIRCULAR No. 230, Regulations Governing Practice before the Internal Revenue Service: This is the primary authority for tax professionals. 

• Section 10.22 (Diligence As To Accuracy): Mandates that tax practitioners exercise due diligence in preparing tax returns, determining correctness of representations, and in preparing or filing documents. 
• Section 10.34 (Standards For Advisory and Signing Tax Returns): Requires tax preparers to exercise due diligence, check for consistency, and ask questions if information appears incomplete or incorrect. 
• Section 10.36 (Procedures To Ensure Compliance): Requires firms to have "adequate procedures" in place to ensure compliance with Circular 230.

IRS PUBLICATION 3112, IRS e-file APPLICATION AND PARTICIPATION: This publication outlines the requirements for Authorized IRS e-file Providers, including the necessity of maintaining accurate records and participating in suitability checks. 

FORM 8867, PAID PREPARER'S DUE DILIGENCE CHECKLIST: This form (and its instructions) is mandatory for preparers claiming certain credits (EITC, CTC/ACTC/ODC,AOTC) or head of household status. It requires confirmation that the tax preparer asked necessary questions and obtained supporting documentation. 

IRS WEBSITE - "DUE DILIGENCE REQUIREMENTS FOR TAX PREPARERS" (EITC CENTRAL): Highlights the duty to keep client documents and notes of information received for three (3) years.

SIGNED ENGAGEMENT LETTER & TAX ORGANIZER:

While the IRS does not explicitly mandate a specific, written engagement letter in a single publication. Circular 230 Sections 10.22 and 10.34 (Due Diligence) imply that a clear understanding of the scope of services, client responsibilities (providing information), and accuracy of records is required to uphold professional standards. 

• Best Practices: Tax Professionals use engagement letters and tax organizers as primary documentation to satisfy these due diligence obligations, defining the responsibilities of both the client and the tax preparer. 
• Records Retention: Documentation regarding the engagement, including a signed engagement letter including a signed engagement letter and the completed tax organizer, is key in providing due diligence in case of an IRS investigation. 

For the mandate of accurate documentation and due diligence, refer to Circular 230, specifically Sections 10, 22, and 10.34. For the specific e-file provider requirements, consult Publication 3112. 

TO ENSURE YOUR TAX RETURN IS PREPARED ON TIME, PLEASE:

1) Sign The Engagement Letter;

2) Complete The Tax Organizer; and

3) Upload All Supporting Documents To Our Secure Portal