My accountant made a HUGE error on my taxes

[pedroo1]

What is the name of your state (only U.S. law)?New York
In 2006, my husband cashed in his 401K. We paid a huge tax on it. That year, our accountant filed our return incorrectly. While the Federal was correctly prepared, the State was NOT. He is retired, so she claimed our ENTIRE income for that year as EXEMPT. What she should have done ( I learned from the State) was to enter my husbands pension on that line, instead of the entire years income, because his pension is state tax exempt. The State sent us a letter one month ago, and stated the error in the taxes. We had to pay over 23,000 for the State income tax for that year. HOWEVER, an interest penalty accrued in the amount of almost 5,000.00. I asked the accountant to pay it, because had it not been for THEIR error, I would have not incurred this interest debt and would have paid the State at the proper time. My accountant says she is not legally responsible to pay, and offered a small amount to us...after admitting to the HUGE error. I think its an integrity issue. So, we are going to small claims court for that interest. Will I get the money from the accountant? What is the name of your state (only U.S. law)?What is the name of your state (only U.S. law)?

[You Are Guilty]

Originally Posted by pedroo1

So, we are going to small claims court for that interest. Will I get the money from the accountant? What is the name of your state (only U.S. law)?What is the name of your state (only U.S. law)?

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[IsabellaSoriano]

i'm actually curious. did the accountant fill out the paperwork and immediately send it out to the IRS? or did the accountant fill out the paperwork, give the paperwork to the husband and wife to sign and THEN send it to the IRS?

[pedroo1]

Yes the accountant prepared our taxes, they signed, then we signed. We paid them 250.00 to correctly prepare our taxes because we have no idea how to do it. We've been going to this accountant for 17 years. I would have never caught that mistake in a million years. I'm in the medical field, not the accounting field! So, I contacted a tax attorney and he thinks we will get that interest from the accountant. I'm just curious what others think. We are going to court soon.

[IsabellaSoriano]

Originally Posted by pedroo1

Yes the accountant prepared our taxes, they signed, then we signed. We paid them 250.00 to correctly prepare our taxes because we have no idea how to do it. We've been going to this accountant for 17 years. I would have never caught that mistake in a million years. I'm in the medical field, not the accounting field! So, I contacted a tax attorney and he thinks we will get that interest from the accountant. I'm just curious what others think. We are going to court soon.

well, here's the thing. when you sign it, you are swearing everything is true and correct. it's your responsibility to look over what you sign before you sign it.

but i could be wrong. my tax accountant has me sign waivers before he signs it. and i read my paperwork. and no, i am not a tax accountant either.

[pedroo1]

True I did sign. However, I thought I signed to the fact that the information that I reported to the accountant is correct. I did look over the return. It did look correect to me, a layperson. I had to put my trust in the accountant that he records the information correctly. I wonder why we pay professionals if they are not going to be held responsible for their mistakes. The rep. at the State yax office said the same thing..."Get the interest from the accountant!" I guess we'll see once we get to court. Like I said , I don't know how to file taxes. I didn't even know the pension was tax exempt until all this happened!