U.S. Tax Attorney

Viacheslav Kutuzov, Esq.

NEW YORK TAX MALPRACTICE ATTORNEY

When a tax return is not filed, filed incorrectly, or prepared without adequate professional care, the consequences arrive swiftly and painfully. IRS and New York State penalties accumulate, tax benefits disappear, and what began as a routine engagement can suddenly become a lawsuit, a disciplinary complaint, or a threat to a professional license. Our practice is dedicated to the legal problems that arise when tax advice or preparation goes wrong, representing both tax professionals seeking to defend their work and taxpayers seeking to recover substantial losses.

We focus on a niche that general litigators and general tax practitioners frequently mishandle: professional malpractice litigation involving tax matters. These cases require not only knowledge of the Internal Revenue Code and New York tax law, but also the ability to reconstruct what the correct tax outcome should have been, prove causation under New York standards, and navigate the procedural tools that often determine the outcome long before trial.

Representation for Tax Professionals

For CPAs, Enrolled Agents, accountants, and tax attorneys, a malpractice allegation is more than a lawsuit. It threatens reputation, client relationships, insurance coverage, and licensure. Many professionals first learn of a problem when a former client receives a penalty notice or discovers that a return was never filed, despite assurances to the contrary. Others face accusations that they failed to advise on estimated taxes following a business sale, mishandled payroll filings, overlooked depreciation deductions, or disappeared during an audit.

Our work begins immediately with understanding the scope of the problem, advising on reporting obligations to professional liability insurers, and developing a defense strategy that may include early motion practice under the CPLR. New York courts frequently dismiss claims that cannot establish the standard of care, causation, or damages, and we aggressively pursue these opportunities. When necessary, we retain and prepare expert witnesses to demonstrate that the professional acted within accepted standards and that the alleged losses were not caused by the practitioner.

For many professionals, a quiet and efficient resolution is essential. We work to limit exposure, avoid unnecessary publicity, and prevent disciplinary proceedings from escalating.

Representation for Taxpayers

For individuals and businesses harmed by negligent tax preparation or advice, the financial consequences can be severe. Clients often come to us after receiving unexpected IRS or New York State assessments, sometimes accompanied by penalties exceeding tens of thousands of dollars, loss of depreciation benefits, or collection action. In many cases, the taxpayer paid a professional to manage the very risks that ultimately materialized.

Our role is to determine what should have occurred, establish that the professional failed to meet the applicable standard, and prove that the penalties, interest, or lost tax advantages resulted directly from that failure. This requires careful reconstruction of the underlying tax filings and financial events, as well as a detailed understanding of how courts evaluate causation in malpractice claims involving tax outcomes.

When appropriate, we pursue recovery not only of tax penalties and interest, but also the fees paid to correct the professional’s errors and the value of tax benefits that were lost permanently.

The Nature of Tax Malpractice Cases

Tax malpractice litigation is fundamentally different from other professional liability disputes. Success turns on demonstrating the hypothetical tax scenario that would have existed “but for” the alleged error. The plaintiff must show that a correct return or proper advice would have prevented the penalties or preserved the tax benefit, while the defense must challenge that chain of causation at every step.

These cases often involve complex procedural issues, including statute of limitations defenses, duplicative contract and negligence claims, and the adequacy of damage allegations. The ability to navigate those issues can determine whether the case proceeds or ends at the pleading stage.

Regulatory and Disciplinary Exposure

Malpractice litigation involving tax professionals rarely remains a purely civil dispute. Almost every significant allegation of negligent tax preparation or advisory failure has the potential to trigger parallel regulatory consequences, particularly when the conduct involves failure to file returns, failure to maintain required records, or misrepresentations to clients about filing status. Several New York complaints explicitly reference communications with the New York State Education Department following allegations of professional misconduct, including failures to file returns, abandonment of clients during ongoing tax matters, and refusal to provide records upon request, all of which may form the basis of disciplinary action against licensed accountants.

In addition to state-level oversight, federal regulatory bodies may become involved when the alleged misconduct implicates duties owed to the Internal Revenue Service. Complaints describing situations in which a practitioner represented that a return had been filed when it had not, or failed to maintain adequate documentation to support return positions, raise issues commonly referred to the IRS Office of Professional Responsibility, which enforces Circular 230 standards and may impose censure, suspension, or disbarment from practice before the IRS.

What begins as a dispute over penalties or incorrect filings can therefore evolve into a threat to a professional’s livelihood. A lawsuit may proceed in Supreme Court while, at the same time, the Education Department evaluates whether the practitioner violated ethical and professional standards, and the IRS considers whether the conduct warrants sanctions affecting the ability to represent taxpayers at the federal level. This convergence of civil and regulatory exposure creates a uniquely high-risk environment for tax professionals, where missteps in one forum may have immediate consequences in another. Our approach accounts for this interconnected structure. We advise clients not only on litigation strategy, but also on reporting obligations, the potential disciplinary implications of settlement positions, and the importance of shaping the factual record in a way that protects licensure and future practice.

For many professionals, the most damaging consequence of a malpractice allegation is not the monetary exposure, but the possibility of disciplinary findings that remain on the public record, limit the ability to practice, or undermine client confidence. By addressing regulatory issues proactively and in coordination with the defense of the civil claim, we work to contain the scope of the problem and safeguard professional standing.

Why Engage a Specialist

The intersection of tax law and professional liability demands focused experience that few general practices can genuinely deliver. Tax malpractice is not a standard negligence case; it requires a lawyer who can proficiently navigate both the Internal Revenue Code and the New York Civil Practice Law and Rules (CPLR).

A traditional malpractice attorney may understand the basic concepts of negligence but often lacks the deep tax expertise necessary to reconstruct returns, analyze complex corporate structures, or accurately quantify damages based on lost deductions or improperly assessed penalties. They know the courtroom, but they may not know the tax code.

Conversely, a traditional tax lawyer may be a master of the IRS or NYS tax laws but struggle with the rigorous demands of civil litigation. They may lack experience in critical procedural elements like drafting dispositive motions (such as motions to dismiss under CPLR 3211), managing extensive discovery, and presenting a compelling case to a jury or judge. They know the tax code, but they may not know the courtroom.

Take Action

Whether you are a tax professional defending your practice or a taxpayer seeking to recover substantial losses, timing is critical. Statutory deadlines apply, penalties continue to accrue, and disciplinary consequences may expand rapidly without proper representation. If you are facing a malpractice claim or believe you have suffered financial harm due to professional negligence, we invite you to contact us for a confidential consultation.

We minimize your taxes domestically and internationally...

Viacheslav Kutuzov