Measure twice, work once: Preventing avoidable IRS mistakes

Some of the most time-consuming IRS interactions aren't caused by audits or balance due notices. They're caused by minor, avoidable errors, like an unchecked box, a missing signature, or a mismatched name and Social Security number. Every tax pro has spent hours chasing fixes for problems that could have been caught with a second glance.

Avoid mistakes the IRS won't ignore

Some errors don't just delay processing, they trigger system-generated letters, rejected returns or freeze refunds. Common examples include:

• Wrong bank account number for direct deposit
• Invalid or missing taxpayer signature on e-file authorization
• Name and Social Security number mismatch due to recent marriage or divorce
• Filing status errors, such as Head of Household (HOH) without a qualifying dependent
• Forgetting to attach required statements for elections or credits

These may feel minor, but they pull you into hours of unpaid correction work. Worse, clients often assume the IRS made the mistake, not you.

Use a pre-filing checklist every time

If you're a solo preparer, build a short checklist into your workflow. It should cover:

• Names, addresses and Social Security numbers verified against ID
• Dependents and relationship tests confirmed
• Direct deposit info reviewed and confirmed with the client
• Credit documentation (8867, education expenses, health insurance) included
• E-signatures received and stored
• Engagement letter signed

Many tax software systems let you customize checklists. If not, create a simple printable spreadsheet that is easy to follow and review before transmitting. Documenting your review process and retaining these checklists also helps protect you against penalties under IRC §§6694 and 6695(g), since they show you met due diligence requirements for certain credits.

Make Form 8867 a due diligence tool, not a checkbox

If your return includes any of the following:

• Earned income credit
• Child tax credit or additional child tax credit
• American opportunity tax credit
• HOH filing status

Then Form 8867, Paid Preparer’s Due Diligence Checklist, is mandatory. But don't treat it as a formality. Use it to walk through:

• Residency and relationship tests
• Income source consistency
• Document verification (school, medical or lease records)
• Interview responses

The goal is to catch weak spots before the IRS does. That reduces audit risk and shows you're applying professional judgment.

Example: How one unchecked box triggered a disaster

You help a client file a 2023-year return claiming the American opportunity tax credit. They qualify; the numbers are correct, but you forgot to check the "Student attended at least half time" box.

The return is processed and flagged. The IRS disallows the credit and sends a notice, confusing and angering the client.

You now have to:

• Draft a written response.
• Resubmit the education statement.
• Possibly amend the return.
• Rebuild client trust.

This is all because of a missed checkbox. This happens more than most preparers would like to admit, and it's preventable.

Build in peer review, even in small firms

If you have a team, create a habit of a second review for certain types of returns:

• High-risk credits
• Self-employed clients
• First-year clients
• Amended returns or multiple years filed together

For solo preparers, try end-of-day review batches. Pause, take a fresh look, or walk away and revisit the return after lunch. Most errors happen not from lack of knowledge, but from fatigue, distractions or repetition.

Don't let software lull you into a false sense of security

Tax software is powerful, but it's not perfect. It can't:

• Verify client-provided data.
• Detect fraud or unrealistic explanations.
• Catch mismatches in names and Social Security numbers.
• Notice if you accidentally reused prior-year inputs without checking.

Software helps, but it doesn't replace the tax professional's judgment. Double-check manual entries, overrides and imported data before you hit submit.

Train clients too

Clients can help reduce errors if you teach them what to watch for:

• Ask them to confirm spelling, birthdates and banking details
• Explain why dependent and HOH claims require proof
• Encourage early submission of tax documents
• Set a policy that all paperwork is due at least five days before filing

This reinforces that tax prep is a shared responsibility, not a race to get refunds faster.