Like all professions, accountants have a few bad apples in their ranks. Everyone makes mistakes now and then and when a CPA makes an error, it’s called Accounting Malpractice. Sometimes the errors involve a missed deadline. Sometimes professionals fail to keep up with changes in the law (after all, there are only 73,608 pages of […]
Dow Chemical Suffers Billion Dollar Tax Shelter Loss – Accounting Malpractice
by Brian Mahany When will they learn? Three times this month we have reported on big banks and corporations that have suffered major court defeats after attempting to claim questionable tax deductions. This week’s IRS victory against Dow Chemical is just one more nail in the coffin of abusive tax shelters. Wall Street bad boys […]
From STARS to SLOTS – More Tax Shelter Woes For Accountants (Accounting Malpractice Post)
by Brian Mahany Last weekend we wrote about STARS, a controversial tax shelter program recommended by accounting giant KPMG. That “star” exploded like a super nova earlier this week when a U.S. Tax Court upheld an assessment of approximately $800 million against Bank of New York – Mellon. Today, Accounting Today reports that another KPMG […]
IRS Wins Tax Shelter Case – Will Claims Of Accounting Malpractice Follow?
by Brian Mahany Earlier this week the United States Tax Court ruled in favor of the IRS in a widely watched corporate tax shelter case. The test case, involving Bank of New York Mellon, could cost the bank $800 million. Although BONY has promised to appeal, the loss may create a waive of accounting malpractice […]
Autonomy and the "willful shock" that accompanies the strategic termination of willful blindness
Guest Post by Charles Seavey [Ed. Note: I found this article in a LinkedIn industry group. With the author’s permission, it is reposted here. Charles Seavey is a lawyer, consultant and writer. He is one of the few folks who writes more articles than I do! Recently I was asked why we post so many […]
Can I Sue an Accountant for Failing to Report My Offshore Accounts?
Accounting Malpractice Post The IRS Offshore Voluntary Disclosure Initiative (OVDI) and other foreign account amnesty programs are long over. Between the 2009 and 2011 tax amnesty programs, roughly 30,000 taxpayers have come forward and reported their offshore accounts. Most have paid severe penalties of 20 to 25% of the value of their offshore holdings. That […]
Accounting Malpractice (Can I Sue My Accountant?)
The term “malpractice” strikes fear in the minds of many professionals… doctors, lawyers and accountants. For most people, their only interaction with an accountant occurs during income tax filing season. People make that once a year visit, drop off a box of receipts and that’s it. For many other people, however, their accountant is also […]
Another CPA Firm Sued For Failing to Spot Ponzi Scheme
by Brian Mahany Eleven months ago, we reported on Frederick Berg and the reportedly largest Ponzi scheme in Seattle’s history. Berg was indicted at the close of 2010 after federal prosecutors say he bilked hundreds of investors out of $130 million. Much of that money was frittered away on Berg’s lavish lifestyle – the Seattle […]
Accounting Firm Sued In Ponzi Scheme Case
[Updated through 2021] Here is a new twist. A hedge fund sues an accounting firm for its failure to uncover a Ponzi scheme operated by one of the hedge fund’s traders. That might sound farfetched, but it’s not. New York accounting firm Rothstein Kass was sued by two hedge fund managers in San Francisco Superior […]
When Auditors Lie
by Brian Mahany In recent months we have run several stories about the sloppy auditing practices of several accounting firms. From David Friehling, the solo practitioner who served as Bernie Madoff’s auditor, to Arthur Andersen LLP, once one of the “big 5” accounting firms and auditors of Enron, sloppy auditing is nothing new. Investors and […]