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I'm checking into this very matter right now. It is my understanding that the CPA may be "on the hook" for penalties, fees, and expenses (including legal) associated with the error or incompetence. It is essentially professional malpractice. I just found out today that although I paid for my former CPA to file my 2007 personal taxes electronically, both federal and state, NEITHER were done. I have documentation showing he was paid for his services, and his instructions, which I received from his office, indicating that he was filing both electronically. I have contacted my attorney and he is handling this matter. He is also still in possession of all of my business records & books and will not turn them over to my new accountant, who has been requesting them since July. Sounds like he has something to hide. It's important to mention that I just went through a partnership split earlier this year. My partner was embezzling and my former CPA never picked up on it for 7 years! I finally found the theft myself! This guy needs to be put out of business. Stay tuned for a name after my attorney gives me the okay! Amy Ney Caldwell, Idaho

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Q: May A CPA be held legally liable due to incompetence?
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