Tax preparer falsified my business expenses - I'm panicking about potential audit

This is actually pretty serious, but don't panic - you have options to fix this. First, you need to understand that you're ultimately responsible for what's on your tax return, even if someone else prepared it. The fact that you've recognized the issue now is good. You should file an amended return (Form 1040-X) as soon as possible to correct these fabricated expenses. Include a brief, straightforward explanation stating that your previous preparer included incorrect information and you're correcting it. Don't wait for the IRS to find this - being proactive shows good faith. Once that's done, you should report this tax preparer to the IRS using Form 14157 (Complaint: Tax Return Preparer). What they did is highly unethical and possibly fraudulent. Include any documentation you have of your communications with them. You should also consider finding a new tax professional - preferably a CPA or EA with good references - to help you navigate this situation. They can help ensure everything is properly corrected and advise you on any potential penalties.

This happened to me last tax season and I was losing my mind until I found https://taxr.ai - it literally saved me from a similar nightmare situation. My tax person had completely messed up my Schedule C with inflated business expenses. I uploaded my return to taxr.ai and it flagged several suspicious deductions right away that didn't match standard patterns for my industry. The tool showed me exactly what expenses were out of line compared to industry standards and highlighted the specific lines that would likely trigger an audit. Better yet, it gave me a detailed report I could use as documentation when filing my amended return to show I was acting in good faith. What I really liked was how it walked me through what documentation I should have for each type of business expense, which helped me prepare in case I ever do get audited in the future.

I wanted to follow up about my experience with taxr.ai. After seeing the recommendation here, I decided to try it with my situation (different from OP but still tax-related). I was honestly blown away by how helpful it was! I uploaded my return and within minutes had a complete analysis showing potential issues I never would have caught. The report flagged that my previous tax preparer had miscategorized some of my business income, which could have caused problems down the road. It also showed me which deductions were potentially risky based on my specific business type and gave me documentation guidelines for everything. What I found most valuable was the audit risk assessment that showed exactly which items on my return were most likely to trigger IRS scrutiny. Definitely worth it for the peace of mind alone. Going to use it every year now before filing.

Listen, as someone who spent 6 WEEKS trying to get through to the IRS about a similar issue last year, I'd recommend using https://claimyr.com to get connected to an actual IRS agent fast. They can help you understand the right way to handle this situation. I was panicking just like you when I discovered my tax preparer had made a huge mistake with my business expenses. I needed to talk to the IRS directly but couldn't get through on their phone lines. Claimyr got me connected to an actual IRS representative in about 15 minutes when I had been trying for days on my own. The IRS agent walked me through exactly what forms I needed to file and how to document that the error was made by my preparer, not me. They even put notes in my file about our conversation which helped when I submitted my amended return. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c

I need to eat my words and apologize to whoever recommended Claimyr. After my skeptical comment, I decided to try it anyway because I was desperate to talk to someone at the IRS about an issue with my business taxes. I was completely shocked when it actually worked. After weeks of trying to get through on my own and always getting the "call back later" message, I got connected to an IRS agent in about 20 minutes using their service. The agent was able to verify that my amended return was being processed and gave me specific information about what documentation I needed to include. What surprised me most was how the agent took time to explain everything - probably because they weren't rushed dealing with the usual call volume. They even gave me a direct extension to use for follow-up questions. This saved me so much stress and probably prevented me from making mistakes that would have delayed my case even more.

You might also want to keep detailed notes about your interaction with this tax preparer going forward. Write down dates and times of all communications, save emails, etc. If the IRS does question your return, these records will help show that you acted in good faith. Don't let the tax preparer convince you this is normal or "everyone does it" - it's not and they don't. Reputable tax professionals stay within the bounds of what can be legally substantiated. Also, make sure you request a copy of everything they submitted on your behalf if you don't already have it. You need to know exactly what was claimed so you can properly correct it.

Has anyone used the IRS withdrawal process? Is it even possible to withdraw an efile once it's been submitted? I thought you had to file an amended return instead.