How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Lawrence D. Gorin Your Own Question

Lawrence D. Gorin
Lawrence D. Gorin, Lawyer.
Category: Legal
Satisfied Customers: 1505
Experience:  30+ years of legal expertise. Informed, knowledgeable, helpful.
8848811
Type Your Legal Question Here...
Lawrence D. Gorin is online now
A new question is answered every 9 seconds

Tax preparer forgot to add penalty for early withdrawal ...

Customer Question

Tax preparer forgot to add penalty for early withdrawal from my 401k in 2006. IRS ontacted me and is requesting the money(early withdrawal penalty plus interest). Is Tax preparer responsible for paying penalty,since it was her fault penalty was not paid when I had the money?
Submitted: 6 years ago.
Category: Legal
Expert:  Lawrence D. Gorin replied 6 years ago.
ANSWER:
NO, so far as IRS is concerned, it is the responsibility of the taxpayer (not that of the tax preparer) to pay the addition tax that is due.

HOWEVER, if you paid money to a "tax professional" (such a lawyer, accountant, licensed tax preparer, etc.) to prepare your return AND you provided to the tax preparer all of the information regarding the pre-59-1/2 distribution from the 401(k), the preparer was under a contractual obligation to do the job correctly and the failure to do so amounts to professional negligence (malpractice). You can then look to the preparer (and sue, if necessary) for the financial loss sustained by you as a result of the preparer's negligence. HOWEVER, the loss sustained by you is NOT the 10% penalty tax itself, since you would have had to pay this penalty assessment anyway had the tax preparer properly prepared your return to begin with. Rather, the preparer's error resulted in your having to pay interest to the IRS on the 10% penalty that was incorrectly omitted from the original return. And that is the extent of the "loss" you sustained as a result of the preparer's negligence.

Also, unfortunately, the fact that you had the money readily available with which to pay the 10% penaly assessment when the tax return was originally prepared and filed, and that it will now cause you financial hardship to now come up with the money, is of no legal conseqence.

Do note, however, that some (but not all) tax preparers sometimes include a "guarantee" (or promise), as an inducement to get your business, to do the job right the first time around and to pay any actual additional tax due as a result to a negligent calculation of your tax liability. So be sure to check the fine print of any written "guarantee" given to you by the tax preparer to see exactly what it says.

=========================
---> NOTICE AND DISCLAIMER (“The Fine Print”): The foregoing response is based only on the facts gleaned from your inquiry and does not constitute a definitive legal analysis or evaluation of the facts and circumstances of your particular case and the law applicable thereto. The information provided here should not be the sole basis for your decision(s) regarding the handling or resolution of the legal problem or issue presented. Limitations and restrictions of this forum prevent any claim or guarantee as to the completeness, accuracy or adequacy of the information contained herein and no such claim is made or guarantee given. The foregoing response to your inquiry is not intended to be and should not be accepted as a substitute for the professional legal advice and counsel that can only be given by a lawyer licensed to practice in the state that has jurisdictional authority over the case. I am licensed to practice law only in the state of Oregon. No attorney-client relationship is intended or created by or through the response(s) given here. (Sorry this is so long. But I’m a lawyer, so it should come as no surprise.)

Having answered your question, please acknowledge by clicking the green “ACCEPT” button. Your question will not close, and you will still have the opportunity to follow-up if needed. Also, please add some positive comments in the feedback space. It isn’t required but is most helpful and certainly appreciated. Thank You!
Lawrence D. Gorin, Lawyer.
Category: Legal
Satisfied Customers: 1505
Experience: 30+ years of legal expertise. Informed, knowledgeable, helpful.
Lawrence D. Gorin and 8 other Legal Specialists are ready to help you
Customer: replied 6 years ago.
Thanks so much. Your answer saved me a lot of time and additional frustration.
Expert:  Lawrence D. Gorin replied 6 years ago.
Actually, no further info is needed. I am just using this method to express appreciation for your kind words.

LDG

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
< Last | Next >
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
  • My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer. Eric Redwood City, CA
  • I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight. Michael Wichita, KS
  • PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent. Three H. Houston, TX
  • Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!! Elaine Atlanta, GA
  • It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem. Tony Apopka, FL
  • Not only did he answer my Michigan divorce question but was also able to help me out with it, too. I have since won my legal case on this matter and thank you so much for it. Lee Michigan
 
 
 

Meet The Experts:

 
 
 
  • Tina

    Lawyer

    Satisfied Customers:

    8436
    JD, BBA Over 25 years legal and business experience.
< Last | Next >
  • http://ww2.justanswer.com/uploads/MU/multistatelaw/2011-11-27_173951_Tinaglamourshotworkglow102011.64x64.jpg Tina's Avatar

    Tina

    Lawyer

    Satisfied Customers:

    8436
    JD, BBA Over 25 years legal and business experience.
  • http://ww2.justanswer.com/uploads/RA/ratioscripta/2012-6-13_2955_foto3.64x64.jpg Ely's Avatar

    Ely

    Counselor at Law

    Satisfied Customers:

    19941
    Private practice with focus on family, criminal, PI, consumer protection, and business consultation.
  • http://ww2.justanswer.com/uploads/FL/FLAandNYLawyer/2012-1-27_14349_3Fotolia25855429M.64x64.jpg FiveStarLaw's Avatar

    FiveStarLaw

    Attorney

    Satisfied Customers:

    8189
    25 years of experience helping people like you.
  • http://ww2.justanswer.com/uploads/jespoag/2008-12-17_222355_jessepic.jpg JPEsq's Avatar

    JPEsq

    Attorney

    Satisfied Customers:

    2132
    Experience as general attorney, in house counsel, SSDI, Family Law attorney, and law professor
  • http://ww2.justanswer.com/uploads/gsenmartin/2008-04-22_214950_me1.jpg Guillermo J. Senmartin, Esq.'s Avatar

    Guillermo J. Senmartin, Esq.

    Attorney

    Satisfied Customers:

    110
    7+ years of experience handling various legal matters.
  • http://ww2.justanswer.com/uploads/PA/PaulmoJD/2013-10-10_195858_JAImage.64x64.jpg Law Educator, Esq.'s Avatar

    Law Educator, Esq.

    Attorney

    Satisfied Customers:

    31621
    JA Mentor -Attorney Labor/employment, corporate, sports law, admiralty/maritime and civil rights law
  • http://ww2.justanswer.com/uploads/dkaplun/2009-05-17_173121_headshot_1_2.jpg Dimitry K., Esq.'s Avatar

    Dimitry K., Esq.

    Attorney

    Satisfied Customers:

    15975
    Multiple jurisdictions, specialize in business/contract disputes, estate creation and administration.