CPA Liability

What is the name of your state? CA

So, I seek advice from a CPA on the selling of my company stock options (previus employer) about a year ago. The advice was wrong. He told me to sell the first day of 07'. I should have sold "X" amount in 06' and the balance in 07'. The damage is that the difference of a 25% to a 28% tax bracket; few thousand dollars. Also, there is the overpayment of SS, that is a samller issue.

Foot note.. I was not charged for the advice, as it was an initial meeting to establish a new client relationship. it was an in person meeting with all documents presented. he simply made an error.

Small claim case? On what grounds?

Thanks in advance...

I don't see the error as yet, but assuming there was one, it does not matter if the advice was given for free or not. The suit would be for professional malpractice. You would need to get an expert to say the advice was not to the level of the standards of CPAs and the error caused damages. The nature of professional malpractice militate against small claims actions, but it's not impossible to go there for relief. Better would be to talk with the guy first and find out his reasoning.

The advive should have been to exercise "X" amount of options in 06' which would have been taxed at 25% rate. The balance of the options would have been exercise in 08' at a rate of 25% and 28%. Because of the error, I am now at the 33% bracket.

I have no idea of what you are talking about without context. You have provided none of that. Throwing out percentages means nothing, especially when hindsight is involved. You need to find an expert who will take the information and say the advice given did not rise to the standards of the profession. Your short description tells only the results and it rarely takes special skill or knowledge to determine what the results are after they occur. It is much harder to predict things.

(By the way, you have no guarantee of what results you will have when or if you exercise the options in '08. AMT is changing, capital gains are dropping and the law is always in flux.)