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Can I sue a tax preparer?

Perris, CA |
Filed under: Tax return Tax law

My mother in law filed her taxes with a new. She was told she was getting a refund of $510. She was never asked to review or sign her tax documents before they filed nor did they ask her for her bank info for a direct deposit. When she asked for a copy of her 1040 they initially denied her request and said they usually don't give copies until after they receive her refund and cut her a check when she told them she needed them immediately they made an "exception" upon review it was discovered that her refund was actually $1079, more than double the amount she was told. When she went to pick up the check they told her the rest of her refund went to the bank in "processing fees". She refused the check. Can she sue for the entire amount? The filing fee was supposed to be only $75 not $500+

She did not sign an e-file authorization form 8879 or anything else for that matter. The person who prepared her tax return claimed to have a CTEC # which when looked up did not match his name. They keep on calling her to try to "work it out" for less than the $1004 she is entitled to.

Attorney Answers 4

Posted

Yes.....sue in small claims and can report to IRS the circumstances to put tax preparer on the black list....but tell the preparer you will do so unless you get your money...they may capitulate without actually having to act on your threat.

My answer is not intended to be giving legal advice and this topic can be a complex area where the advice of a licensed attorney in your State should be obtained. Please click "helpful" or "best answer" if my answer added any value or add a "comment" if you have more info for me to help you get a better answer.

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1 comment

Nedeen Magdy Nasser

Nedeen Magdy Nasser

Posted

Reporting this to the IRS is important.

Posted

You can sue, that's easy, winning is a tougher challenge, even winning a motion to dismiss is tougher, use avvo asap to consult a local attorney

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Posted

Can you sue? Probably. Consider the costs of court and attorney time to even get it rolling, it would likely be economically impractical to proceed with that course of action.

I would be more concerned about the potential fraud, misrepresentations, and related misconduct where she was not afforded an opportunity to review the return before it was filed on her behalf. Also that the refund was double is a cause for concern due to tax fraud.

On one hand there are tax issues to resolve with the IRS (especially if the return is selected for audit) then there are civil/consumer issues with the preparer. The preparer has their own outstanding potential liabilities with the IRS (see generally: http://www.irs.gov/pub/irs-utl/return_preparer_penalties.pdf)

She should call the IRS hotline and get a copy of the return that was filed to see if there is a urgent need to amend. That's the first step before figuring out the way forward. Then she should likely figure out if there are more serious tax or civil/consumer issues and book an initial client consultation with the right type of lawyer - most should offer a free initial client consultation just to discuss the situation so she won't be out any further money.

Best of luck

There is NO attorney-client privilege based on this interaction. I am NOT your attorney. We have no signed engagement letter with a clear understanding regarding fees. Further, everything we both just wrote is publicly available on the internet and would be the same as if we were talking in a crowded restaurant, there are many witnesses looking over your shoulder and can repeat anything you write here. If you need legal assistance use Avvo to find a local attorney in your jurisdiction that you feel can best represent your interests as a zealous advocate. My experience is in corporate tax, white collar criminal defense, partnership tax, and tax controversy/litigation. If you're being audited by the IRS or state taxing authority, or you are taking an unusually risky tax position on a return, that is the kind of thing you should have experienced counsel on your side and we can set up an initial consultation. If you have a family law, debt collection, violent crime sort of issue then I do not handle that. Do not contact me for an initial consultation on non-tax matters.

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Posted

You can pretty much sue anyone as long as it's not frivolous. However, in your case, you should prepare and file IRS form 14157, "Complaint: Tax Return Preparer." If they stole from your mother in law then they've probably stolen from a lot more people you don't know about. And yes, she can simultaneously file a small claims action for the total amount of the refund. She might even consider reporting it as a theft to her local law enforcement agency.

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