I was the designated TMP (Tax matters person) for an LLC
. We hired a CPA
to do our taxes for 2011 and 2012. We are in the construction phase and we are about to complete the construction. Our CPA deducted some of these costs as expenses which passed through our individual tax returns through the LLC K1's(partnership
The losses he took were something like $40K and $80K per LLC member.
My co owner went to another CPA to get our tax returns reviewed. This CPA found several errors in the tax returns and said that our CPA shouldn't have deducted any costs as we are still in the startup
phase. I immediately told my co owner that we should go ahead and amend the LLC tax returns.
My co owner is very mad at me since I was the one who signed the tax returns. He contends that I should have reviewed the returns before signing. Since I know nothing about partnership taxes, I trusted our CPA and didn't review the returns.
He still blames me for breach of fiduciary duty and has threatened action against me.
What action can he take? Can he remove me from the LLC?
Since I have invested my life savings in this project, I don't want to loose my investment