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What recourse do I have against my bonded bookeeper who made mistakes in past income taxes

San Diego, CA |

I found out that my accountant made mistakes in my income taxes reports starting in 2004 and ending in 2010. Mostly are omissions (some costs that should have been included in my rental properties and the self employed taxes for 2007 and 2009). Can I demand a refund from the fees paid to her (Avg. $500) for these omissions. She was going to make them again this year and I called her out so she included them for the 2011. Please advise.

Attorney Answers 3


If you are unable to obtain relief by filing amended tax returns, you may be able to make a claim against your accountant for negligence. A negligence claim typically is covered by an accountant's professional liability policy. You have a duty to try to reduce your damages, which is why you have been given good advice to also seek the assistance of a tax attorney to first try to correct the returns you still can.

With respect to the fees, generally the fees you paid are not recoverable in a lawsuit for damages caused by your accountant's negligence. You can demand that she return them but first it makes sense to determine if you've really been harmed, and if so, by how much.

One advantage to asserting or threatening a claim against the accountant is that her insurance company may try on your behalf to mitigate (reduce) your damages by assisting you with filing amended returns. Still, you should have your own attorney in the process to oversee the tax work.

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Generally, bonding us used for an insulation against theft.

Stuart Hurwitz, a San Diego CPA, Attorney and former head of the Tax Section of the State Bar of California should be contacted. He is local. He has been through this and other dilemmas.

You can file 1040X's for the open years (hint, the 2008 year will close with this years tax due date unless you filed an extension in 2008.

I give a link below to his office web page which will give his phone number

Curt Harrington Patent & Tax Law Attorney Certified Tax Specialist by the California Board of Legal Specialization PATENTAX.COM This communication is general information and not legal advice, and does not create an attorney-client relationship. This communication should not be relied upon as any type of legal advice. Please note that no attorney-client relationship exists between the sender and the recipient of this message in the absence of either (1) a signed fee contract and (2) remission of an agreed-upon retainer. Absent such an agreement and retainer, I am not engaged by you as an attorney, nor is any other member of my law firm.

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Attorney Harrington offers sound advise and gives you an excellent referral.

Mr. Lively is a Certified Tax Specialist by the State Bar of California Board of Legal Specialization. He can be reached at 714-708-2593 or individual seeking legal advice for their own situation should retain their own legal counsel as this response provides information that is general in nature and not specific to any person's unique situation. Circular 230 Disclaimer - Advice given in this response cannot be used to eliminate penalties with the IRS or any other governmental agency.

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