The Difference Between Preparing a Tax Return and Filing a Tax Return

Recently, a client was in the process of refinancing their existing mortgage with their current mortgage company.  He was supposed to close two months ago.  The mortgage company continues to ask for more information from our client.

The mortgage loan officer called me one evening and wanted to know if I filed my client’s business tax return.  I told her we did not file the tax return, we prepared the tax return.  She seemed a little confused when I told her this.  I then explained the difference between preparing a tax return and filing a tax return.

In Connecticut, when we prepare business tax returns, we prepare them and give them to the client to sign and mail.  So when the loan officer asked if we filed the client's returns, I wasn't being funny, I was merely explaining the process.  She said she needed proof that the returns were mailed.  I told her she needed to take this up with the client as we just prepared the returns.

Furthermore, we always advocate that all returns that are mailed are sent Certified Mail, Return Receipt Requested.  This will provide proof the returns were filed.

We have always given this advice so you could substantiate filing with the tax authorities.  Now, apparently, you will need this proof when applying for a mortgage.  Boy, have the rules changed with attempting to get a mortgage.

ACTION ITEM:  When filing a tax return, be sure it is sent Certified Mail, Return Receipt Requested.

Thomas F. Scanlon, CPA, CFP®
 

About the author:

Karen Tedford,

9 Comments on "The Difference Between Preparing a Tax Return and Filing a Tax Return"

  1. Carolyn Dionne
    Dec 3rd, 2010

    We have heard of this happening many times with our mortgage clients. I think sometimes clients think that their accountant mailed them in and just gave them a copy!

  2. tom-scanlon
    Dec 5th, 2010

    Carolyn,

    This seems to be a very common misconception.

    Regards,

    Tom

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