Tax Law (Questions About Taxes)/Tax Mistake by hired CPA

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Question
John,

My wife and I embarked on checking our previous tax returns against software we purchased for accuracy because we suspected that our tax professional might not be filing our taxes correctly.  

We started to think in this manner when we noticed that we may not be eligible for Roth IRA contributions.  After reviewing last year's returns, we found that indeed my wife had contributed to a Roth IRA in a previous year and we should not have based on our earnings.  As such, the tax law says we need to pay a 6% penalty on this contribution amount given the grace period has passed.  

When I contacted our CPA to correct the matter, he refused to fix it and stated that it was not his fault that we were not smart enough not to watch our limits on our investments.  He said it was not his responsibility to look at our investments as our tax professional.  

We are not working to correct the matter ourselves by filing the appropriate forms and paying the penalty, but I am really upset that he is not liable for something like this.  Do we have any recourse in this matter?

Thanks,

Mike

Answer
Mike,

Thanks for your question.

It is the responsibility of the tax return preparer to file a correct return. Knowing the limits is a part of what he should know. Most preparers, especially CPA's, will pay the penalty for a mistake made on their part.

Your best recourse is to contact the state board of accountancy. Contacting the IRS Office of Professional Responsibility would be another option.

Hope this helps.

John Stancil, CPA  

Tax Law (Questions About Taxes)

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John Stancil, CPA

Expertise

I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at www.mybaldcpa.com. I also offer seminars and consultations to churches and clergy on their tax issues at www.churchtaxsolutions.com Also visit my blog, www.thetaxdocspot.com. I am listed on Tax Connections at https://www.taxconnections.com/profile/John-Stancil/12258973 Prepare and file your own taxes at www.1040stancilcpa.com

Experience

I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

Organizations
FICPA, NATP, NCPE Fellowship, Lakeland Business Leaders

Publications
The CPA Journal, Florida CPA Today, Green Consumer, Green Business, Global Sustainability as a Business Imperative, Palmetto Review, NATP TaxPro Quarterly, Mustang Journal of Finance and Accounting.

Education/Credentials
DBA University of Memphis MBA University of Georgia BS in Accounting Mars Hill University

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