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Author Topic: Legal Advice + Tax Prep  (Read 536 times)
HSakols
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« on: September 12, 2013, 08:50:12 AM »
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Hi,
My CPA this year told me that he needed to file an extension because of not having enough time.  About 6 weeks ago I got a fine from the IRS for late payments.  I sent the notice to my CPA and he told me he would get back to me which he never did.  When I talked with him on the phone he admitted that he may not have filed an extension but he would look into it. A few weeks later I got a notice from the IRS saying that my fine has increased 3x.  Again I talked with my CPA. He now refuses to talk with me about the situation and I have a huge fine due by Sept 23rd.  The bottom line is he did not file the extension but expects me to pay the fines for his mistake.  The amount is $2400. What sort of legal recourse do I have? Getting any attorney is expensive, yet I won't stand being screwed.  Is this a small claims issue or should I just find a attorney? I have the paper work and it does state that no extension was filed.  Today I have to go in unannounced and be the bad guy.  Would you pay the fines now or let the responsibility fall on the CPA?  Any advice would be appreciated.  I've never had a legal issue like this and don't know where to begin.

Hugh
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PeterAit
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« Reply #1 on: September 12, 2013, 09:07:20 AM »
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Is your accountant a CPA? That is, a CPA as opposed to just anyone who can claim to be an "accountant?" There are pretty strict licensing and ethical standard for CPAs, so that might be where to start. If not a CPA, you have just learned a potentially expensive lesson - use a CPA!! Just because your brother-in-law's cousin bought TurboTax does not make him an accountant.

Next, consult with a lawyer. Not just any lawyer, but someone with a track record in this general area. You'll get an idea if you have recourse, if the recourse might include legal fees, and so on. A lot may depend on the documentation you have (or don't have). It's also true that a stern letter threatening legal action can often get some action (this has worked for me in recovering a $15K debt from a deadbeat client).

Good luck

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Peter
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HSakols
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« Reply #2 on: September 12, 2013, 10:00:48 AM »
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Peter,
Thanks for your response.  Yes he is a CPA and yes I have the documentation.  I will look into finding a Lawyer.  What a pain in the ___.

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Slobodan Blagojevic
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« Reply #3 on: September 12, 2013, 11:17:16 AM »
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...Would you pay the fines now or let the responsibility fall on the CPA?...

Hahaha... sorry to laugh at your misery, but it is hard to believe there still is so much naiveté when it comes to matters of taxes. With the caveat that I am not a lawyer, I suggest you pay the fines, like, right now, even before responding to me on this thread (to stop the accumulation of penalties and interest). Taxes are YOUR and solely your responsibility, regardless of who prepared the return. Just ask guys, including celebrities, who sit in jail, blaming their CPAs. You can then pursue a separate legal or licencing-related action against the CPA.

EDIT: After paying the full amount, I would then go visit the IRS, in person, without a lawyer, and kindly ask them to consider waiving the 3x penalty, explaining the situation, that it was not intentional, etc. I have no idea whether that would actually work, but that's what I would try if in your shoes. You have nothing to lose.

EDIT 2: As for finding a lawyer, I do not think he would help with the IRS, as it is a rather clear-cut case from the IRS point of view. At the same time, even if he would miraculously manage to fully eliminate your fines, most lawyers these days would not even look into anything without about $3,000 in their pocket first. The same goes for pursuing civil action against the CPA. You might want to look into small-claims court though.
« Last Edit: September 12, 2013, 12:20:24 PM by Slobodan Blagojevic » Logged

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Justan
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« Reply #4 on: September 12, 2013, 11:47:25 AM »
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I got phucked by a CPA at one time as well. I feel your pain.

Definitely pay the fine ASAP. If you can’t do this, at the very least write a letter to the IRS and apprise them of the situation and pay whatever you can. A better idea is, if needed, borrow money to pay the fine, and file papers for an extension yourself. The IRS is known to be unkind once they get their clutches on someone.

With regard to other comments, hire lawyer who specializes in tax related cases.

But the most important detail here is to get the IRS off your back as soon as humanly possible. It will save you a lot of $$ to do so.
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langier
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« Reply #5 on: September 12, 2013, 02:29:42 PM »
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1. Pay off the IRS ASAP. That should stop more immediate bleeding. You may have issues with your state taxing board also so get prepared.

2. Find another CPA or Enrolled Agent to properly handle your predicament.

3. Check into your state Consumer Affair's Department of Accountancy to find out how to proceed. They probably have a step-by-step protocol you must follow to do things right and protect your rights.

4. Send a letter to your CPA stating the facts and your desired outcome with a reasonable deadline. Send certified. Business-like is better than emotional, so write a "hate letter" first and burn it then send your real letter to your former CPA.

Take a breath, just another detour on the road of life and good luck!



May require a complaint, investigation, claim against any errors and omissions coverage or bonding.

Locally years ago, this happened with a CPA in our small town. He somehow got in over his head and failed to not only file, but send in the $$$. Lost his license and I think fined and jailed for his misdeeds.
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Larry Angier
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HSakols
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« Reply #6 on: September 12, 2013, 02:34:07 PM »
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Thank for taking the time to respond. It is kind of tough to find someone to talk with about this in my town.  I'd rather discuss photography and put this behind me.  Paid.  Still they are fines accumulated through 2012.  I would have hoped my CPA could had me even overpay a little to avoid fines like this.  And yes I understand perfectly well that my taxes are my responsibility -lesson learned. 
« Last Edit: September 12, 2013, 02:36:21 PM by HSakols » Logged
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