tax-law
sole proprietorship tax question
<p>This is the first year I am working with a my tax person, and they intend to file for me as described above. My question is about the contract they sent over, which is not that extensive, but the part, which I like to get your comments about is that "...you have the final responsibility for the income tax returns...". Now being a novice, I went back and read my tax returns from previous years, and the associated documents from a very popular if not the most popular tax service here in the States, and I don't see anything similar to it. But they never did SP for me. I am embarrassed to say I know next to nothing about this, and I have already got a book to educate myself in this area. But any advice is greatly appreciated. Am I being overly concerned? Given that I exchanged a number of emails with my current tax person, I wish they had told me ahead of time and perhaps even sent me a copy of the contract they would want me to sign. But it is so short that I am not sure if I am over reacting. What are some requirements for filling a SP income tax? Is it more risky to do? What are the long term requirements for filling SP? Would I be locking myself into anything if I do this? </p>

<p>You are <em>always</em> solely responsible for your taxes irrespective of if the contract says so or not.</p>

<p>If they negligently advise you and the tax authorities that you owe $100 when you really owe $100,000: you owe $100,000 plus interest and penalties if you don't pay on time. You are then free to sue your agent for the damage you suffered (the interest and penalties - the original tax was not damage).</p>
