Have you been working with a partnership client or Schedule C client for a couple of years, only to find out: “Oh, by the way, we incorporated two years ago?” Or the taxpayer brings you a notice for non-filing penalties on the partnership or S corporation you didn’t know existed?
When you are working with existing business clients for several years, you are not concerned about their prevailing business structure. After all, if you have been filing the wrong entity’s tax return, you would have been alerted by now. Right?
As it turns out, not always.
When you find out about the error, your gut reaction is that it’s your fault. Is your errors and omissions insurance (or malpractice insurance) up to date? Take a deep breath; it’s not your fault. Probably. Let's keep reading and find out.