Is a CPA liable for this?

[non-ditzyblonde]

What is the name of your state? CA

I am one of three partners in a commercial rental property. Each year for the past 9 years, we've given our CPA a complete written statement of income and expenses in order to prepare our return.

This year, we decided to do the return ourselves. In doing so, we looked at past year's returns, and found what we thought were errors. Through anonymous calls to the IRS, we confirmed that the returns were indeed prepared incorrectly. Our expenses were inflated, reducing our tax liability.

We understand that should we be audited, we will be responsible for back taxes, interest and penalties. But does the CPA have any liability here? We always gave him accurate figures, and we have copies of everything we sent to him.

If we end up owing the IRS for this, do we have any recourse against the CPA? Are there any other issues I might be unaware of regarding this kind of situation?

Thank you very much for any help you might offer

Dennis

[abezon]

You can report him to the state CPA licensing board for malfeasance. You might be able to sue him for the interest & penalties, should the IRS assess any.

You may also be liable for filing a fraudulent return. You are responsible for reviewing the accuracy of any return you sign. You might contact the CPA & find out why his expense figures don't match yours. It could be that he calculated the expenses properly, or expensed things that you exepcted him to depreciate.

[non-ditzyblonde]

Thank you for the information, Abezon. The fraudulent claim issue is what concerns us most, and I appreciate hearing your view of this. We had a falling out with the CPA last year for an unrelated matter, so we're not keen on contacting him, but we're going to speak with a tax attorney next week.

Dennis

[williams_95136]

I own commercial property too. and I know there are a lot of stuff that is added to the tax forms to lower your tax rate like depresiation for eg. all of that I leagal deduction. but you migh not know about it. send your past year taxs to onother CPA to check befor you take any acctions

[non-ditzyblonde]

Thanks for your reply, williams. There are many things I don't know about filing taxes, i.e. different ways to expense various items, and I'll be talking with a CPA and tax attorney next week.

Dennis