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points by ttthuy 1 day ago | 0 comments

Someone still needs to take liability for mistakes.

The real issue is that accountant most likely has a track record of those kinds of mistakes - but you have no info on other clients. So you weren’t as informed at the time you chose them vs the new one.

[–] paxy 1 day ago

People misunderstand the concept of liability. Yes your tax professional is liabile for fraud or gross misconduct, but if they make a mistake which results in unpaid taxes or fees you're still the one on the hook.

[–] dghlsakjg 1 day ago

Typically you are on the hook for paying the actual taxes and penalties, but if you acted in good faith on the negligent advice of a tax professional many jurisdictions allow you to recover the costs of penalties and interest accrued as a result of the negligent advice.

[–] tchalla 1 day ago

How much money does that take?

[–] dghlsakjg 1 day ago

How long is a piece of string?

[–] latentsea 1 day ago

Twice the length from one end to the middle.

[–] holdingunsteady 1 day ago

Yeah, I looked him up just now actually, and he has a 3-star rating on Yelp... Which I think is pretty low for accountants?

I think the red flag should have been when he printed out all my tax returns and made me pick them up in person, and didn't even send a digital copy.

[–] kjksf 1 day ago

In this case accountant DID NOT take liability for mistakes.

It's not the accountant that paid $20k for his mistake but the accountant's client.

[–] ffwang2 1 day ago

i'm a bit unclear who has the liability even when you use a CPA. accountants are humans that sometimes make mistakes.

[–] raegis 1 day ago

The IRS made it crystal clear to me long ago. The tax filer is responsible for everything on the tax return, regardless of the preparer. Of course, accountants can be liable in other ways, but the filer has to pay the fines if the accountant makes a mistake.

[–] dghlsakjg 1 day ago

From the IRS' point of view, the tax-payer is responsible for paying all of it. You can then turn around and sue to recover any of the fees/fines or penalties incurred as a result of an error made by the accountant, not the actual taxes though.

[–] ThunderSizzle 1 day ago

It seems disingenuous by our government. Create a tax strategy that is so complicated, people feel like they have to hire professionals. However, if the professionals err, it's the citizenry that pays the penalty.

Seems like simplify or just erradicting the tax code would be more just at this point.

[–] dghlsakjg 16 hours ago

You can - literally - have the same government force the negligent CPA pay via the judiciary. That’s what a lawsuit is.

Normally it doesn’t get to that point though. CPAs do not want to be known as the person that misfiled taxes and got a court to rule them negligent. They carry insurance for errors so mostly just end up queitly making it right when there is an error.

[–] inemesitaffia 1 day ago

I believe it's a global thing.

In some jurisdictions, it may help with criminal but not civil liability.

[–] ElCapitanMarkla 1 day ago

In NZ the liability is generally on you and not the accountant.

[–] matkoniecz 1 day ago

> Someone still needs to take liability for mistakes.

I am not aware of setups available to me that would transfer liability onto accountant.

So in either case I am taking liability.

(also, I am pretty sure that if corporation loses 10 millions over accountant making bad decisions, they are not going to recover that funds either)

[–] ffwang2 1 day ago

yeah i think liability ultimately lies on the individual. of course, you could sue your accountant, but that feels hard, maybe almost as hard as suing the model providers.

[–] skinfaxi 1 day ago

Yes, at least in the US the individual must sign their own return.

[–] matkoniecz 1 day ago

At least in Poland it is not viable. Friend's business lost noticeable amount of money because accountant has not filed taxes and lied that they filed and lied that they checked it.

And there was no real path to recovering funds, except small part, after long court case.

At least they were able to fire them without severance pay.

[–] TheOtherHobbes 1 day ago

This seems to be usual. Accountants are liable for crimes like embezzlement, but tax authorities hold individual tax payers responsible. If tax payers want to recover losses they have to go to court, which is often risky because accountants will say the client didn't do A, B, and C.

[–] matkoniecz 14 hours ago

> Accountants are liable for crimes like embezzlement

and even then, if they already lost all money you may be unable to recover it