Legal Question in Tax Law in California
CPA malpractice
Do I have a malpractice case if ... ?
- my tax CPA (personal) files an extension on April 15 due to his time constraints
- he has all of my materials (W2, stock exercise, stock sales, etc.) by March 15
- claims he doesn't need any more information, never asks for or receives any more information from me
- calculates the tax payment on the information I provided - this payment for Fed and State is paid before April 15
- says he will have the return done in May
- I call or email him many times, mostly no response, when he does respond he tells me it will be done the following week (this goes on for 4 months)
- doesn't complete the actual return until Aug 13, 2001
- informs me on Aug 10 (for the first time) that he miscalculated the tax payment because he mistakenly used long-term instead of short-term capital gains (even though he had all the documentation by March 15 showing all exercises and sales of stock occurred within a 1-4 month window)
- net additional payment for me = $32,000
- I don't have $32,000
How can he share in my misery?
1 Answer from Attorneys
Re: CPA malpractice
Probably not. You really don't have much of a loss as you would have had to pay the tax anyway if he had not made a mistake. He should be responsible for any additional amounts required to be paid, interest or any penalties, if any. He also shouldn't charge you his full fee either. While he is guilty of not being timely and in making an error in calculation, damages are measured by economic loss. Since you would have owed the tax any way, that can't be the measurement of the loss
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