Is a CPA responsible for giving bad advice on non-profit tax filings?
Saturday, May 1st, 2010 at
4:36 pm
If a non-profit org should have been filing federal returns and should have filed for a tax exemption, but has a letter from a CPA saying it doesn’t need to, will the CPA have to pay the fines that the IRS dishes out for failure to file?
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You can ask the CPA to pay the penalties.
You can sue the CPA for negligence if he doesn’t.
The non-profit should ask the IRS to waive the penalties.
Dear B: Most professionals have a dis claimer to not only protect their name but to inform people about the law and the fact that it changes from year to year. If the CPA informed you wrong and it was intentional I would think you need an attorney. If it was an honest mistake I think you are out of luck. The IRS will waive fines if you relied upon advice from an IRS agent and it was wrong but for a CPA I doubt it. Write a letter and ask.
This advice was prepared based on our understanding of the tax law in effect at the time it was written as it applies to the facts that you provided. Click on my profile to read more. Errol Quinn Enrolled Agent Master Tax Advisor