That sinking feeling when you discover your business taxes weren’t filed or were done wrong just stinks. What is worse is that you likely hired a professional to ensure your taxes were handled correctly. Missing deadlines or filing the taxes incorrectly is more than frustrating. It can lead to IRS penalties, mounting interest, even audits, or legal headaches.
At 1818, we hear this question often:
Can I sue my accountant for not filing my taxes?
The short answer: Yes, you can—if their mistake caused real financial harm. If your accountant or tax preparer failed to meet the professional standard of care, you may have grounds for a malpractice claim.
How Accountant Negligence Can Harm Your Business
When you hire a CPA or tax preparer, you expect competence and reliability. You’re focused on running your business. They’re supposed to handle the numbers.
But when they don’t file your return—or file it incorrectly—you’re the one on the hook.
Here’s what you could be facing:
- Late filing penalties that keep compounding
- Accrued interest on unpaid taxes
- Damage to your business credit
- IRS audit triggers due to filing inconsistencies
- Lost time and money fixing mistakes that weren’t yours
The IRS doesn’t care who was “supposed” to file your taxes. They care that you didn’t file or that they were incomplete. That’s why tax preparer negligence isn’t just inconvenient—it can derail your entire financial year.
When a Missed Filing Becomes Accounting Malpractice
Accountant malpractice is more than a one-time error. It happens when a tax professional fails to meet the basic duty of care expected in their industry, and that failure causes measurable harm to the client.
That duty includes:
- Filing accurate, complete returns on time
- Communicating tax obligations and deadlines
- Maintaining accurate records of what was done and when
If your accountant agreed to prepare and file your return and failed to do so, that may be malpractice. Especially if you’re now facing penalties, an audit, or other fallout from their inaction.
What You Have to Prove in an Accountant Malpractice Case
Not every tax mistake equals a lawsuit. But if you’re thinking about taking legal action, here’s what you’ll need to show:
1. Duty: They were hired to do the job.
This often involves an engagement letter, contract, or even email or text correspondence that shows they agreed to prepare and file your business tax return.
2. Breach: They didn’t file your taxes correctly or on time.
Examples include:
- Telling you the return was filed (when it wasn’t)
- Missing filing deadlines
- Filing incomplete or incorrect forms
- Failing to notify you of problems
3. Damages: You suffered financial harm.
You need to show real losses. That could include:
- IRS penalties and interest
- The costs of hiring another CPA to fix the problem
- Legal or audit defense costs
- Business disruption tied to the mistake
No harm = no case. But if your financial losses are directly linked to your accountant’s failure, you may have a viable malpractice claim.
What You Can Recover If Your Accountant Dropped the Ball
If you’re successful in proving accountant negligence, you may be able to recover damages such as:
- Reimbursement for IRS penalties and interest
- Fees paid to correct the mistake (including other accountants or tax professionals)
- Compensation for lost revenue or business disruption
- Legal costs related to an IRS audit or defense
- Any other expenses directly caused by their malpractice
The goal of a malpractice claim is simple: put you back where you would have been if your accountant had done their job correctly.
What to Do If You Think Your Accountant Made a Serious Mistake
If you believe your tax preparer or CPA mishandled your return, here’s what you can do right now:
1. Gather Documentation
Keep copies of:
- Emails or texts showing they agreed to file
- Invoices or contracts
- IRS notices
- Proof of penalties, interest, or audit activity
- Any communication that contradicts their actions
2. File the Return
If the filing hasn’t occurred, complete it as soon as possible. Bring in a new, trusted accountant who can help clean up the issue and get you back on track.
3. Calculate the Cost
Add up what this mistake has cost you—financially and operationally.
4. Consult a Legal Malpractice Attorney
An experienced malpractice attorney can help you determine whether the facts support a malpractice claim—and what next steps make the most sense.
What Your Accountant Might Say in Their Defense
Don’t expect a quick apology. Most professionals will defend themselves. Common defenses include:
- “You didn’t give me the documents I needed.”
- “I was hired to prepare—not file—the return.”
- “I told you about the delay, and you didn’t follow up.”
- “You contributed by not responding on time.”
- “You missed the statute of limitations to sue.”
These aren’t automatic deal-breakers, but they highlight why clear communication and well-documented records are crucial to winning an accounting malpractice case.
Is It Worth Suing Your Accountant?
That depends. Before filing a claim, ask yourself:
- How much money is at stake?
- Do you have written proof that filing was part of the agreement?
- Does the accountant have professional liability insurance (E&O)?
- Can this be resolved through negotiation or mediation?
- Are you prepared for the time and energy litigation requires?
If the damage is minor, filing a malpractice lawsuit may not be worthwhile. But if the stakes are high, pursuing a malpractice claim could be your best chance at recovery.
Many tax professionals carry errors and omissions insurance, and they may be willing to settle if presented with a strong, well-documented case.
How 1818 Can Help
If your accountant failed to file your business taxes—and now you’re dealing with the consequences—it’s not just a paperwork problem. It’s professional negligence, and it could entitle you to compensation.
At 1818, we help business owners evaluate whether they have a case, gather the right documentation, and navigate the claims process from start to finish.
Even if you’re not sure your situation rises to the level of malpractice, we’ll give you a straight answer.
