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Accounting malpractice and negligent tax advice

On Behalf of | Aug 3, 2022 | Business Litigation

When you run a business, the last thing you want to find out is that someone has given you bad accounting advice. You want to know that the information you receive is fair and accurate, so that you can make decisions that are good for your business.

If you are contacted by the Internal Revenue Service or find that the books aren’t lining up with your personal account documents, you may want to look into accounting malpractice and determine if your accountant isn’t doing their job correctly. If they give you poor tax advice or make mistakes that lead to heavy penalties or expenses, it may be time to get the law involved to protect you and your business.

What are some examples of accounting malpractice and giving negligent advice?

One example would be giving the wrong tax advice to a business owner, such as informing them that they don’t need to pay quarterly or that they can deduct expenses that they are not allowed to deduct. Both of these things could lead to financial penalties and trouble with the Internal Revenue Service.

Another potential case of malpractice could include failing to provide accurate financial statements to the business owner for whom they’re handling accounts. If you don’t have a good idea of what your accounts actually are, then you can’t make solid decisions for your business.

When is it time to contact an attorney?

You may want to contact an attorney about accounting malpractice if your business has lost $500,000 or more because of an accountant’s actions. Alternatively, if you are dealing with problems with the IRS or have other concerns, you may want to reach out to an attorney to learn more about your legal options and what you can do to protect your business.

Remember that you only have two years to start accounting malpractice or negligence litigation when you need to make a claim. California set the two-year statute of limitations to protect defendants and make sure cases are handled soon after the offense occurs. Don’t delay if you think you want to make a claim.