Horrible tax information resulting in total destruction from accountant
What does a person do after they incorporate then goes on to find an accountant to make sure everything is right with the IRS and then down the road, maybe two years later, this person finds out that absolutely everything the accountant said, and worse yet, everything they did including filling out and filing forms, was incorrect? Is the accountant liable in any way since she was the one who did the work and filled out all the forms and signed the forms as well. What if this person also said they had been going to the IRS office to straighten matters out and never went? What if all the information regarding your business was incorrect? And now the business could be in possible ruins? What if any recourse is there? Does the IRS recognize any of this and would they work with a person in lieu of this fact?
2 Answers from Attorneys
Accountant error resulting in damage to business
Michigan law provides for claims against an accountant for losses due to accountant malpractice, not unlike claims for attorney malpractice and physician malpractice. An accountant who provides incorrect advice, upon which the client relies, may be a ground for a claim against the accountant for whatever damages can be shown to have resulted from the incorrect advice. The term "may be" is important, because the facts and circumstances surrounding the advice are critical to the client's reliance. This matter should be reviewed carefully and immediately by an attorney who not only is well-versed in tax law, but who also is experienced in negotiating with the IRS. The IRS may reduce penalties which result from error by professionals hired and relied upon by the taxpayer. The matter must be brought before the IRS timely.The principal concern should be to remedy the situation with the IRS immediately. In many cases, especially those involving withholding tax for employees, the officers or shareholders of the corporation may be personally liable for the taxes, interest, and penalties. The corporate structure does not insulate individuals who duty was to cause the corporation to pay its tax liabilities. Additionally, a Michigan taxpayer whose federal taxes are at issue should investigate liability for Michigan taxes. Again, these issues should be addressed immediately by an experienced, qualified tax attorney.The relief which may be obtained against the accountant will depend further on whether the accountant has assets to satisfy a judgment, if the court finds in favor of the client/taxpayer. In any event, the claim against the accountant, however successful it might or might not be, should be secondary to commencing negotiations with the IRS.
Accounting malpractice
In my state (NC) you would appear to have a malpractice case against the accountant, and possibly even fraud (fraud is hard to prove). It's time for you to see a lawyer in your state - and fast!
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