Tax reassessment - possible issues

maasai wrote: ↑ So we got a notice that a previous year tax submission is being reassessed. When pulling all the files together I noticed that a couple of invoices were submitted as receipts for daycare which caused some double counting. Guessing they will claw back a portion of the tax return paid to us.

Now we used a nationwide Income tax prep company for our taxes that year and they claim "accuracy guarantee" with them reimbursing any penalties or interest.

So the question is, who claims fault in this? Us for unknowingly including in our files for taxes or them for not catching it before submitting?

actually you are responsible for all data provided to tax prep company. I dont think they are are fault. Its up to you to make sure its all proper. They are just submitting the claim on your behalf.

Well, if OP just dumped all his receipts to the tax company, shouldn't they keep their "accuracy guarantee"? Otherwise why the heck do you pay a company when you can do it for free in StudioTax? (best software NA btw)

You are at fault. Plain and simple.

And yes, CRA will take money back with interest.

I agree with the other posts that it is your fault, for submitting the invoice and receipt at the same time to the tax preparer. S/he relied on your knowledge on the legitimacy of the documents provided. Garbage in, garbage out.

Given that it is a (well-known) nationwide tax prep. company, it is not too surprising that a junior level employee twice missed the obvious difference between an invoice and a receipt when sifting through the supplied paperwork.

But, accepting that their guarantee is primarily for more significant errors wholly on their part, I feel OP has some justification for expecting them to cover the penalty.

Surely a lot of their clients hand over a shoe box stuffed with papers knowing that the service they are paying for will figure it all out - possibly after some to-and-fro with questions or requests for missing paperwork.

Wouldn't they have errors and omissions insurance that would cover instances like this?

You are responsible for your tax return regardless and you will be responsible for any money owed, penalties or interest.
Whether you can get something from the company that did your return will be between you and them. If they have a guarantee and you provided accurate info, then by all means check with the company to see what the guarantee covers.

Your fault, but that doesnt prevent you from trying to hold the taxprep company to their guarantee.