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Author: vkg Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 120820  
Subject: Data entry error/audit risk Date: 11/19/2009 12:25 PM
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A recent widow trusted her late husband and paid tax preparer. It was a very stupid decision and is likely to be an expensive one. In helping her understand her finances, we were reviewing her previous years tax returns. I am very concerned about the previous few years tax returns. I did not see the previous years tax returns, until after last years taxes were filed. I believe there are mistakes. If I am right, one recent year could be off by more than 25%. The others are closer to being correct.

I had her ask her tax advisor a specific question and verified here that the answer was wrong. I thought that her husband and tax preparer were ignoring inconvenient tax laws, but the tax preparer was just unqualified. Soon afterwards, the tax preparer also died.

The IRS has sent a communication regarding the year of most concern. I won't have access to the letter or tax return for a couple of days. It sounds like the data entry error was caught with an automated review.

Does finding a data entry error on a tax return make it more likely that the return will be more throughly audited?

The plan is to direct her to the CPA that does taxes for other members of her family. He is reliable and I would trust his recommendations regarding her situation. I was hoping for more time to allow other issues to be resolved before opening this can of worms. At least resolving the data entry error will make it a smaller problem. The best possible answer is that I am wrong and there are no other problems.
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