Legal Question in Legal Malpractice in New York

Attorney Negligence results in IRS Tax Fines

Attorney representing Estate failed to file IRS 'Tax Election 6166', resulting in significant fines & penalties. Decedent passed 1998. As of 6/02, neither the Attorney or Estate Admin has filed the proper IRS taxation documents. Estate sizeable, aproaching $2 Mill, NY-based. Heirs were intending to keep real estate owned by decedent. Since no 6166 filed, which would have allowed heirs to pay-down inheritance taxes, now forced to liquidate real estate to meet staggering tax bite & heavy fines. Attorneys negligence also apparent with other aspects of estate. During Discovery failed to replevin misappropriated assets valued at $100k+ despite full knowledge of responsible parties. Atty and Admin very uncooperative, looking to cash-out/take fees, no regard for anything else. Heirs compelled to retain own Tax Lawyer to protect financial interests. Estate attorney won't cooperate with Tax Lawyer. Then, Estate tax accountant goes AWOL, also won't cooperate. Everything secret, nothing forthright. Heirs tax lawyer has petitioned for Compulsory Accounting, says Malpractice suite against Estate lawyer very real, we should pursue. We want to hear from an aggressive attorney experienced in Malpractice who is results oriented.


Asked on 6/28/02, 2:22 pm

2 Answers from Attorneys
Matthew Schwartz Schwartz & Ponterio, PLLC

Re: Attorney Negligence results in IRS Tax Fines

Although it sounds like the attorney may have committed malpractice, generally, in the absence of fraud or other special circumstances, the heirs would not be able to assert a malpractice claim against the estate attorney. This is because the heirs lack "privity" or a direct relationship with the attorney who has been hired to represent the estate, not the individual heirs. Thus, if there was malpractice, any claim would belong to the estate, not the individual heirs. If the administrator is not cooperating, it will be difficult to pursue this claim unless you can prove fraud. If you can prove that the administrator and the attorney are defrauding the other heirs, it's a different story.

It sounds like your attorney is on the right in seeking an accounting in Surrogates Court. If you would like to discuss the case further, please give me a call. My practice focuses primarily on legal malpractice claims.

Matthew F. Schwartz

(212) 421-2233

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Answered on 7/09/02, 8:39 am
Kenneth J. Ashman Ashman Law Offices, LLC

Re: Attorney Negligence results in IRS Tax Fines

Please feel free to check out my firm's website at www.lawyers.com/alo. Among the accomplishments are successful outcomes from suing attorneys who fail to meet a reasonable standard of care.

-- Kenneth J. Ashman; Ashman Law Offices, LLC, 156 West 56th Street, Suite 1902, New York, NY 10019; [email protected]; www.lawyers.com/alo

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Answered on 6/30/02, 11:14 pm


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