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August 17, 2025

What are the Signs of Negligence in Tax Preparation?

Categories: Accounting Malpractice

When you hire an accountant to help you with your books, you’re seeking someone with experience to prepare the necessary steps to keep you aligned with reporting and taxlaws. Discovering that your tax return was prepared incorrectly or neglectfully could be a shock, especially as you’re left facing the consequences. Early detection is a good way to protect yourself against the possible consequences of bad tax preparation. Knowing the signs is critical, especially if you need to file an accounting malpractice claim. By working with an accounting malpractice attorney in Florida, you stand the best chance at protecting evidence that is crucial to your claim.

By working with an accounting malpractice attorney in Florida, you stand the best chance at protecting evidence that is crucial to your claim.

Call (813) 225-4000 to schedule your consultation with Wagner, McLaughlin & Whittemore today.

What Counts as Tax Preparation Negligence in Florida?

Basically, your accountant negligently prepares your tax return when he or she fails to perform as a reasonable accountant would under similar circumstances. If you can prove the four elements of negligence, you may be able to claim accounting malpractice. Those elements are:

The Accountant Owed you a Duty of Reasonable Care

When you pay a tax preparer or accountant to complete your taxes properly, they have a duty to exercise reasonably their skill to fulfill their contractual and legal obligation. That means they need to follow rules and deadlines, keep accurate records, and comply with applicable professional standards.

The Accountant Breached the Duty of Care

If your accountant’s work falls below the standard of care owed to you, they breached the duty of reasonable care owed to you.  This isn’t just making a mistake — they could have filed a critical deadline without an extension or claiming unsupported credits. The distinction can be tricky, but an accounting malpractice attorney can help determine if you were actually damaged because of negligence.

The Breach Damaged You

Called “causation,” you will need to show that the breach of reasonable care proximately caused you to incur damage.

You Suffered Damages Because of the Breach

You will need to show that your tax preparer’s negligence caused you to suffer harm, like penalties, interest, professional fees to correct your tax return, or other quantifiable costs.

Showing there was negligence involved in your tax preparation goes beyond experiencing a hefty tax bill. You need to show that the accountant’s mistakes led you to experience actual financial harm.

Clear Signs Your Tax Preparer May Have Been Negligent

Accounting malpractice is not a term that applies to undesirable outcomes to your tax bill. There are specific areas that can be considered negligence, like:

Filing & Deadline Failures

• Returns filed late with no valid extension; resulting penalties and interest.
• IRS or Florida Department of Revenue notices for non-filing or late filing.
• You never saw or signed Form 8879 (e-file authorization) before transmission.
• The preparer claims “we filed,” but there’s no IRS “accepted” acknowledgment.

Return Quality Red Flags

• Obvious math or data-entry mistakes (transposed SSN/EIN; totals that don’t add).
• Filing status that doesn’t match your situation; duplicate dependents.
• Missing income that appears on your IRS Wage & Income transcript (W-2/1099 not reported).
• Unsupported deductions/credits (large round-number expenses with no backup; aggressive positions without documentation).
• Missed carryforwards/carrybacks, basis adjustments, depreciation, or retirement contribution limits.
• Multiple amended returns to fix basic errors.

Business-Client Red Flags

• Payroll deposits or Forms 941/940 don’t tie to books; missed Florida reemployment tax or sales tax filings.
• Worker misclassification issues that reasonable diligence would catch.
• Bad depreciation schedules or inventory accounting that contradict your general ledger.
• Multi-state or local tax filings ignored despite clear nexus.

Preparer Conduct Red Flags

• “Ghost” preparer: refuses to sign the return or use a valid PTIN.
• Refund directed to the preparer’s account or fee tied to refund size.
• Won’t provide a copy of the filed return, workpapers, or e-file proof.
• No engagement letter; unclear scope; poor communication; pressure to “just sign.”

How to Preserve Evidence to Support Your Claim

Accounting malpractice cases are built on the evidence you can provide to show the preparer’s negligence caused you financial harm. Evidence doesn’t last forever, and because of Florida’s statutes of limitations, it’s critical that you act as soon as possible to protect the possibility of holding a negligent preparer responsible.

Start an Evidence Folder Today

Create a single folder (digital and/or physical) and include:

• Filed returns for the years at issue, any extensions, and IRS acceptance acknowledgments.
• Form 8879/8453; engagement letter; invoices; proof of payment.
• All emails, portal messages, texts, and notes from calls/meetings.
• Source docs: W-2s, 1099s, K-1s, brokerage statements, receipts, ledgers.
• For businesses: bookkeeping files (e.g., QuickBooks backup), trial balance, bank/credit card statements, payroll reports.

Pull Official Records

• IRS Account and Return Transcripts and Wage & Income Transcripts for the relevant years (confirms what was filed and when, and what the IRS received).
• Florida Department of Revenue account histories (sales/use tax; reemployment tax).
• From payroll providers: filing confirmations and deposit reports.

Send a Preservation & Records Request to the Preparer

Send a short, factual letter 0r e-mail requesting the complete file:

• Workpapers, schedules, and source documents relied upon.
• Correspondence log and e-file/EFIN records.
• Copies of anything submitted to agencies on your behalf.
  Provide a reasonable response date. Keep a copy and mailing proof.

Protect Digital Evidence

• Pause auto-deletion on e-mail, messaging, and document storage.
• Export e-mail archives and download portal threads; retain original files with timestamps.
• Keep a simple chain-of-custody note for key items (what it is, where it came from, when saved).

Be Careful Before “Fixing” Returns

Amending or paying a notice without advice can affect proof of causation and damages. Get an independent CPA or forensic review first; then coordinate corrective filings with counsel.

Move Quickly to Meet Proper Deadlines

Florida’s timeline is short and fact-specific. Acting promptly improves your ability to gather records, consult experts, and meet deadlines.

How Wagner, McLaughlin & Whittemore Can Help

• Case evaluation: We assess duty, breach, causation, and damages, and outline options.
• Expert analysis: We review workpapers and financials with independent experts. One of our attorneys, Don Greiwe, is also a CPA and understands the standards at issue.
• Negotiation and litigation: We pursue recovery from responsible professionals and insurers. If settlement isn’t fair, we’re prepared to litigate.
• Statewide representation: Based in Tampa, serving clients throughout Florida.

FAQs: Tax Preparation Negligence in Florida

I signed the return—can I still bring a claim?

Yes. Your signature doesn’t excuse professional negligence. If the preparer failed to meet the standard of care and that caused losses, you may still have a claim.

Can non-CPAs or national chains be liable?

Yes. Any paid preparer owes duties to clients. Liability depends on the facts and whether the standard of care was breached.

What damages are typically recoverable?

Common categories include penalties and interest tied to the negligence, fees to correct the return and address notices, and other resulting financial losses. Recovery of taxes you truly owed is uncommon.

What if the preparer says I didn’t provide documents?

Keep proof of what you provided and when. If the preparer failed to request needed items or ignored clear discrepancies, liability may still exist. Your communications and upload logs matter.

How long do I have to act in Florida?

Because of Florida’s Statute of Limitations, you typically have two years from discovery (or when you should have discovered the malpractice with reasonable diligence). Because timing can be complex, consult counsel promptly if you suspect your accountant may have been negligent.

Who Can Be Liable for Tax Preparation Negligence in Florida?

In Florida, liability can attach to CPAs, Enrolled Agents, paid non-CPA preparers, and the firms that supervise them. The right defendant depends on who prepared, reviewed, or supervised the work and how the engagement was structured.

Who Can Bring an Accounting Malpractice Claim?

The client who hired the preparer can sue. Third parties (like lenders or investors) may have limited options only if the preparer knew and intended that a specific third party would rely on the work in a defined way.

Do I Need to Wait for the IRS or Florida DOR to Finish Before Filing?

Not necessarily. You can consult a Florida accounting malpractice attorney while notices or audits are pending. Coordinating timing ensures you preserve claims without undermining causation or damages.

Talk to a Florida Accounting Malpractice Lawyer

If you’re seeing red flags in your returns or notices, bring your evidence folder to a focused consultation. Wagner, McLaughlin & Whittemore will review your situation, coordinate expert analysis, and help you decide the best path forward. Call (813) 225-4000 or contact us online to get started.