Is Your CPA Liable If You’re Audited?

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What happens when you get audited and assessed a penalty by the IRS? Can you sue your accountant?

Tax Audit Representation:

Ask your accountant if you will have to pay an additional fee for audit representation if you get selected for an audit.

Your Tax Return, Your Responsibility

The IRS doesn't care if your accountant made a mistake. It's your tax return, so it's your responsibility. Even though you hired an accountant, you are liable to the IRS for any mistake. So, if the IRS adjusts your tax liability and says you owe more money, it'll be you who has to pay, not your accountant. Make sure to review your income taxes carefully before signing.

However, it doesn't seem fair to put you through the hassle of being audited when your accountant did make an error. They're the experts, not you. That's why most tax professionals, while not required by law, will compensate you if you do end up owing money to the IRS if they did something wrong.

Negligence

What about the penalties and interest? You wouldn't have had to pay if your accountant didn't screw up. Can't you sue for that?

Yes, you could sue on the grounds of negligence.

No One Has To Be at Fault

Usually, taxpayers believe they did something wrong to be red-flagged for an audit. The truth is that you can be randomly selected without any provocation on your part. Unless the IRS plans to send an actual agent to visit you at home (a bad sign) or you've engaged in tax fraud (also not good), you likely only have to worry about the inconvenience and professional fees of dealing with the IRS.

Peace of Mind

TAX AUDIT PROTECTION AND REPRESENTATION
With our tax audit protection plan, tax notice support and audit representation are included for the life of the tax return, giving you the peace of mind you deserve.

We provide our current clients with audit protection services. We will deal with ANY issue, big or small, and our service covers all types of tax returns on the federal and state level at no additional cost to you. You do not have to deal with the IRS or State tax authority at all!

Let's talk, book an appointment here.

Miguel A. Palma, CPA, PFS, CGMA

Founder of Palma Financial Services, Inc.
miguel@palmafinancial.com

Palma Financial Services, Inc. ("PFS")has helped small business owners minimize income taxes and build wealth since 1998.

PFS has achieved positive results for its clients, but our top clients' successes are not typical. Because past performance is not a predictor of future success, you may have more or less success depending on many factors, including your background, experience, work ethic, client base, and market forces. Additionally, at times we may discuss the law or new and pending legislation. Please know our understanding of it is continuously changing. You cannot and should not rely upon these communications for legal, financial, or accounting advice. For the latest updates, set up a time here.

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