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Clemenza Concierge

Let down by a professional you hired

The numbers were wrong, and you paid for it

The notice from the tax agency says you owe penalties and interest on a return you paid someone else to prepare. Or a business discovers that a bookkeeper had been quietly taking money for years, through audits that said everything was fine. When an accountant, auditor or tax preparer falls short of the care their profession expects, and it costs you, there may be a claim against them.

Tell us what happened

Not every tax bill is the accountant's fault

This is the awkward part, and it is better said plainly. If you owed a tax, you usually still owe it, whoever prepared the return. What may be recoverable from a careless accountant is the extra cost the mistake caused: penalties, sometimes interest, a benefit you lost because a choice or deadline was missed, and the cost of putting things right.

Which of those count depends on the state and the facts.

What the accountant agreed to do matters

Accountants do different jobs, and they are judged by the job they took on. The engagement letter (the agreement that sets out the work) usually says which one it was:

  • Preparing tax returns, from the information you supplied.
  • Keeping the books, recording income and spending as it happens.
  • An audit, the most thorough check of a business's financial statements.
  • A review or a compilation, lighter services that check less, or simply arrange the numbers you gave them.

Deal with the tax notice first

A notice from the IRS or a state tax agency usually has its own response deadline, and missing it can make things worse. Answer it on time, with help from a tax professional or a lawyer if you need it, even while you're thinking about a claim. The IRS sometimes reduces penalties when a taxpayer had a reasonable cause for the problem, and relying on a professional's advice can occasionally be part of that.

Complaints about an accountant

Each state has a board that licenses accountants and can discipline them, and the IRS has its own office that oversees many people who represent taxpayers before it. A complaint to either is separate from a claim for money. It can matter to the public, but it usually won't get your loss back.

What helps to have ready

  • The engagement letter, which often spells out exactly what the accountant agreed to do.
  • The returns, financial statements or audit reports at issue.
  • Every notice from the IRS or a state tax agency, with the envelope it came in.
  • Emails and notes of what you told the accountant and what they advised.
  • Invoices from the accountant and proof that you paid them.
  • For a business: who handled the books, and when and how the problem came to light.

Where we fit in

A lawyer at our firm looks at your case. If we take it and another firm is better placed to lead it day to day, we choose that firm from firms we have vetted for their expertise and track record, and we stay responsible for your case with them.

Questions people ask

The engagement letter says the accountant's responsibility is limited. Is that the end of it?

Not always. Engagement letters can shape or limit a claim, and some require arbitration, which is a private hearing instead of a court case. How far those terms hold depends on the wording and the state. Send the letter with your inquiry.

The preparer wasn't a licensed accountant. Does that matter?

It can change which rules and which oversight body apply, but anyone who prepares returns for pay can be responsible for careless work.

Should I switch accountants?

That is up to you. Many people do, so that someone independent can check the work. Ask for copies of your records in writing, and keep everything you already have.

More about let down by a professional you hired

This page explains things in general terms. It is not legal advice about your situation, and the law differs from state to state.