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Richard, Attorney
Category: Legal
Satisfied Customers: 55702
Experience:  Attorney with 29 years of experience.
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Our tax preparer for our corp. screwed up and never e filed

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Our tax preparer for our corp. screwed up and never e filed our 2011 taxes. They didn't catch this mis step until they e-filed our 2012. Nothing was said to us until we received a penalties and fee letter from the IRS. Not very long after the state franchise board had a letter too with penalties and fees. We soon contacted our taxmans office to see what in the world is going on and they do not respond to either voicemail or email. Its coming up on the "forward to collection" date that the IRS has established and still no response from the taxmans office. Should we go ahead and pay for the penalties and fees and then initiate a small claims suit? Owed to both intenties combined is around $6,000
R. Dean
Welcome! My goal is to do my very best to understand your situation and to provide a full and complete answer for you.

Good morning. Yes, the first thing you want to do is to mitigate the damages by paying the taxes, penalties and fees. That will stop the meter running on these. Then, file your claim against the tax preparer to recover everything but the actual taxes you would have owed had the returns been properly filed. Since you would have owed these in any case, you can't recover these. But, you can recover all the penalties and fees. In addition, you can file this claim as not only a negligence claim, but also a gross negligence claim and pursue punitive damages as well.

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Customer: replied 4 years ago.

Can I persue punitive damages in small claims court?

Thanks so much for your reply. Seeking punitive damages is not prohibited in small claims court. It's up to the judge to determine the amount of punitive damages. The only limit is the small claims court limit for damages which is now $10,000.
Thank you so much for the positive rating! I appreciate having had the opportunity to serve you! If I can be of assistance to you in the future, just look me up and I will be happy to help! For easy access, my bookmark is: