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If your CPA prepares your taxes for you, and you end up incurring penalties as a result of mistakes he makes, are you liable for the penalties, or is the burden on him for screwing up?

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The IRS will hold you liable (with interest) for your taxes.

How much (if anything) you get from your preparer is based upon the agreement (should in writing) you have with your preparer. Of course you could always sue your tax preparer if they are grossly incompetent, but usually is more trouble than it's worth.

I believe the IRS softens its stance on penalties when you erroneously follow the advice of a paid tax preparer.