If you depended on your accountant to handle your taxes for you, and your accountant breached this trust, you may have an accounting malpractice claim against your accountant. Accounting malpractice claims are handled in much the same way as other professional malpractice claims. You must establish four elements to prevail in court---professional duty, breach of that duty, causation and damages. If you can establish these four elements, you may file a lawsuit in state court against your accountant.
Get a copy of the accountant's professional standards. Accountants are all licensed by state professional associations, and these associations require adherence to written professional standards of ethics and competence. These standards are available to the public upon request.
Determine exactly how your accountant failed to meet the above professional standards when handling your taxes. You will need to choose the breach in such a way that there is a direct relationship between the accountant's failure and your losses. For example, an accountant has a duty of professional care that is higher than the duty that the IRS would hold you to if you prepared your own taxes (because he is professionally licensed). If he made a careless error, you can allege a breach of the duty of care.
Trace the exact causal relationship between the accountant's breach and your loss. For example, if your accountant attempted to claim an illegal tax deduction that caused you to underpay your taxes, you will be able to claim any actual damages that were reasonably foreseeable consequences of this error.
Calculate the exact amount of damages that you suffered as a result of your accountant's malpractice. Although you should include both direct and indirect damages, such as interest, penalties, fines, or interruption of your business caused by IRS seizure of your assets, you will not be able to claim damages that were not caused by your accountant's error (an unrelated error that did not cost you any money, for example).
Draft a civil complaint in which you allege all four of the above elements. You should also ask for court costs and attorney's fees, although the court may refuse to award them to you. File this complaint with the state district court. If an issue of federal law is involved (an interpretation of the federal Internal Revenue Code, for example), you may file suit in the federal district court that represents your district.
- A less-than-ideal accounting job does not necessarily give rise to a valid malpractice claim---it must be serious enough to constitute professional negligence. For example, failure to claim an obscure tax deduction of dubious applicability might not qualify as professional malpractice even if the IRS agrees that you could have taken the deduction.
- If you don't have enough money to pay a lawyer to file a lawsuit for you, be aware that many lawyers will take your case with no up-front fees if they think you have a good case. If you lose, you pay the lawyer nothing, but if you win the lawyer takes 30 to 40 percent of your judgment.
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