The first thing you need to do is get things right with the IRS. Make sure that the filing they currently have on record is the return that you filed. If you were not charged penalties or interest in this matter I am not sure what your damages would be in a lawsuit. If this company is licensed - they are CPA's or enrolled agents - you can report them to the agency that licenses them.
Any 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.
It's probably not tax fraud; most likely just sloppy work. If you wind up with any penalties before you consider suing you should talk to them, and ask them to pay your out of pocket expenses in fixing the problem.
The response given is not intended to create, nor does it create an ongoing duty to respond to questions. The response does not form an attorney-client relationship, nor is it intended to be anything other than the educated opinion of the author. It should not be relied upon as legal advice. The response given is based upon the limited facts provided by the person asking the question. To the extent additional or different facts exist, the response might possibly change. Attorney is licensed to practice law only in the State of California. Responses are based solely on California law unless stated otherwise. Any federal tax advice contained in this communication is not intended, nor written to be used, and may not be used, for the purpose of (i) avoiding penalties that may be imposed under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any tax-related matters addressed herein.
The IRS can issue penalties to tax preparers who are negligent and/or fraudulent. I think you have a case for negligence here. Try talking to them first to see if they will reimburse you for any money lost.