Archive for the ‘Statute of Limitations’ Category

“A remarkable reversal of fortune”

Wednesday, September 26th, 2007

“A remarkable reversal of fortune” was the court’s rather restrained characterization of what happens when the IRS initially sends you a bill for $35 million in back taxes, but then later decides that the government owes you a refund.  (My initial reaction was — now there is good tax attorney at work!).

Even with this reversal of fortune, however, the taxpayers decided that they did not get the service they should have from their accountant and therefore sued for malpractice.  The court decided that the statute of limitations runs from the IRS’ final determination (the one here where the taxpayer ended up with a refund) rather than from that jaw-dropping initial communication that the taxpayer owed millions in back taxes.