Problem with Accountant Need Advice

[diamondstudsetc]

I just got notification from the IRS that I'm being audited. The reason for the audit is because my stock trades were never reported in my taxes, and of course the online brokerage firm reported this to the IRS. I gave my statements to my account but she failed to put the trades in my tax return. She started to enter them, and was not happy about entering in all the trades, but then told me she doesn't think she needs to report because it looks like I had a loss. My question to all of you is, do I have a legal case against my attorney?

 

[tranquility]

You owe the taxes and the interest. The accountant/attorney owes the penalty and will be in trouble with the IRS for the intentional error.

You may not have any taxes due or any penalty or any interest upon correction of the error. Then, your damages is the difference between what it would have cost for the person to do things properly and the cost it is for you now to do it right.

 

[davew128]

This type of thing just irritates the hell out of me. I can understand the accountant's frustration at feeling she has to enter all those trades but simply ignoring it altogether? Of course there are ways to circumvent that issue, and OP just as a future reference it may be in your best interests in the future to give your NEW accountant schedules from your brokerage that resemble the format of Schedule D.

I disagree that the accountant owes the penalty mostly because I don't think there will be one when all is said and done. I doubt there is even additional tax and interest if we are to believe it was a loss to begin with. OP, provide info to the IRS to substantiate that you don't owe money because you had a loss and chalk it up to a life experience.

 

[diamondstudsetc]

Accountant Problem

You owe the taxes and the interest. The accountant/attorney owes the penalty and will be in trouble with the IRS for the intentional error.

You may not have any taxes due or any penalty or any interest upon correction of the error. Then, your damages is the difference between what it would have cost for the person to do things properly and the cost it is for you now to do it right.

The account is fixing the problem. I don't want to hire an attorney to go after the accountant but if I did, is there anything to gain by me if I were to do this?

 

[tranquility]

I think it is unlikely you will have any damages unless you sold the stock for a big profit. So, no. You will not gain anything from suing the accountant.

It also frustrates me that a supposed professional blows off doing things right because it is hard. I remember one year the IRS wanted every stock listed on schedule D. Even that year we would give a total and attach a statement if the trades were extensive. Especially with some traders, it would have cost them hundreds of dollars just for the time to enter all the transactions. The IRS came to their senses the next year and we never had a problem on how we did it.

 

[davew128]

The account is fixing the problem. I don't want to hire an attorney to go after the accountant but if I did, is there anything to gain by me if I were to do this?

Sure you could recover your monetary damages, which I would be estimate to be zero if he is fixing the problem.