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Sue an accountant who filed your taxes incorrectly when penalty is involved?

An accountant who handled taxes did not report the taxable income correctly. Clients actually owed taxes but did not realize it. The IRS notified them a year later. The IRS is billing for the taxes owed and a near $2000 penalty which includes interest. Is it ok to sue the accountant for the penalty?

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6 Responses to “Sue an accountant who filed your taxes incorrectly when penalty is involved?”

  1. Mrs. Grotts to be on 4/26/08! said :

    YES. It is legal to sue an accountant because of any sort of penalty charges incurred that wasn’t a result of your own doing, as it goes with anyone else.

  2. kckid2 said :

    Sure. You can sue for negligence, but not the tax. The tax is yours alone, perhaps the accountant didn’t know the rules.

  3. Richard B said :

    The clients could give it a try. Interesting though that the clients didn’t see the completed forms before they were filed. It seems to me that the accountant has to show these forms to the clients to make sure that they are error free. Also, the clients have to sign to forms.

  4. Moe Joe said :

    This is a sue happy country. You can sue anyone you want to sue.

  5. Jim Kirby, CPA/PFS, CFP, CFS said :

    Most accountants would want to work this out with you rather than be sued. There are other avenues instead of or in addition to suing such as filing a complaint with the state board of accountancy in your state. The accountant will not want a complaint against him because that information is available to the public. I recommend that you start by asking the accountant to pay the penalty if indeed it is his fault. Have you talked to him or her about doing that? If you try to talk it out and that doesn’t work and you can prove it was his negligence then go ahead and sue him.

  6. Ira01 said :

    If the accountant made a mistake, then he/she should pay the penalty (but not the back tax, of course, since you owed that from the beginning). In addition, the interest is not a “penalty,” because you have had the use of that money for the last year, when you wouldn’t have if the taxes had been done correctly initially.


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