Deliquent Tax b/c of Accountant

[aalphonse]

What is the name of your state (only U.S. law)? NY/NJ

I work in NYC and live in NJ. My job does not take out NJ taxes on my paycheck/W2. Therefore my accountant filed my 2006 Income Tax Return electronically where he was able to determine how much NJ taxes I owed since I worked a couple of months in NJ in 2006.

Last month I received a letter from the IRS requesting all the backup info of my 2006 return, which I forwarded to them with copies of my W2s. The result was the IRS stating I owe money because the wrong figure was used from my NYC W2 to calculate the credit. I had my accountant review the case and he responded by saying he will reimburse me for the penalty (which was small) but that I have to pay the interest and the money owed as I have had the use of that money all this time.

Q: I don't have a problem paying back the money owed, but shouldn't the accountant also cover the interest since the reason why I didn't pay that money in the first place is because he calculated the wrong amount for me to pay?

 

[FlyingRon]

You had constructive use of the money you should have paid. You owe the interest.

 

[aalphonse]

I may have had constructive use of the money, but I wasn't aware that I owed it. Otherwise I would've paid it when it was due. Since it was the Accountant's error, why am I paying for it?

 

[Zigner]

I may have had constructive use of the money, but I wasn't aware that I owed it. Otherwise I would've paid it when it was due. Since it was the Accountant's error, why am I paying for it?

I agree with you from a "what seems fair" perspective. However, from a legal perspective, you do owe the interest.

 

[FlyingRon]

I may have had constructive use of the money, but I wasn't aware that I owed it. Otherwise I would've paid it when it was due. Since it was the Accountant's error, why am I paying for it?

It doesn't matter that you weren't aware. You knew you had the money. You got to use it for six months or whatever.

 

[LdiJ]

I may have had constructive use of the money, but I wasn't aware that I owed it. Otherwise I would've paid it when it was due. Since it was the Accountant's error, why am I paying for it?

As some already said, its because you had the use of the money.

Our firm pays both penalty and interest when we make an error, but that is honestly not the industry "norm", nor is it something that the law would expect a paid preparer to do. We do it for the PR value.

 

[aalphonse]

Thank you all for your input. While the reality is unfair that I have to pay for someone else's mistake, it's good to know that some firms do what's right rather then follow the 'norm.'

P.S. I'll be looking for an accountant who is fair. Hopefully I'll find one before 2009 taxes are due.

 

[jgombos]

The OP may be liable to the state for the interest, but the accountant is liable to the OP.

OP would win a small claim against the accountant; although probably not enough money to bother.

 

[LdiJ]

The OP may be liable to the state for the interest, but the accountant is liable to the OP.

OP would win a small claim against the accountant; although probably not enough money to bother.

I am going to disagree. The accountant didn't have constructive use of the money, the OP did.