In 2014 I hired Jackson Hewitt to do my tax return. Months later I received a notice from the IRS that I owed them over $3000.00 dollars. And it also resulted in owing the state . I contacted them in person and they said the individual no longer worked there. I had someone else straighten it out costing more money. Can I sue the individual to recover the lost money.
I did you owe the taxes? If so what is the lawsuit about ? Extra fees paid to straighten it out? If the firm made a mistake they should not have charged a fee
Generally the employer is liable for negligence of an employee, and usually it is easier to recover from the employer. We often sue both initially, to pressure the employer into settling.
It is only penalty and interest that are commonly recovered against a preparer for negligence. Not a lot of lawsuits, because the IRS is often willing to negotiate those elements in return for an admission as to the tax due and payment. The cost of fixing the mistake can sometimes be recovered, but may net out from what the first preparer would have charged based on hourly rates.
The response does not form an attorney-client relationship, nor is it intended to be anything other than the educated opinion of the author, and should not be relied upon as legal advice. The response given is a generalization applying to some possible situations. For consideration of the factors which are relevant to any legal problem, please consult an attorney.
I hold a tax license, and this is a common occurrence I see. In general when we sue on these cases, you can prevail on the penalties and interest you have to pay, but not the base tax. The reasoning behind this is because you would have owed the tax regardless of whether they did it wrong or not. In other words, if you got a refund and should not have received it, you used the money, not the preparer. Sometimes you will also get awarded fees for the attorney, or fees to fix the return. I never get the base tax owed though.
Julie Camden is authorized to handle IRS matters through the United States. Her phone number is 317-770-0000. Her email is [email protected] For further tax advice, go to www.camlawyers.com.
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