Are you telling me I should have an EA doing my taxes instead of a CPA?
Not necessarily. If your CPA is familiar with your tax situation and actually looks out for you, have him/her continue to prepare your returns. Too often though, CPA's hardly look at, never mind actually prepare, the returns they sign. Instead, they send out an annual 'organizer', which is a summary of last year's income and expenses, along with a questionnaire. You fill out the boxes, which correspond to certain data entry fields in the tax software. The entries are made by a clerk in the CPA's office, who then prints the tax return. Unless they actually scrutinize the return and think about your particular tax situation and offer advice, they're providing no more value to you than Turbo Tax would for $20.
Was the error from two years ago something you failed to tell the CPA about? Was it something he should have known and questioned you about before filing the return? Was it information you gave him and he missed?
If your CPA is familiar with your tax situation and actually looks out for you, have him/her continue to prepare your returns.
Thanks, he does.
For a simple error, you won't need representation. Did you fail to disclose some income that was otherwise reported to IRS? Or did you take some deduction that was not allowed? If a portion of the penalty is an 'underpayment penalty', you can file a 2210 and maybe mitigate it somewhat.
The error I made was that I didn't report income in box 10 of my wife's W2- her child care account. I also screwed up on the child care expenses deduction and didn't put the correct number in (too low of a number) the two errors offset eachother somewhat.
I used Turbotax, that was the first year I claimed a child care deduction and the instructions were a lot more confusing at tht point in time than they are now to me.
The IRS did not assess me a penalty (yet) only the underpayed amount along with about 8% total interest.