by Brian Mahany
Taxes are complicated. During a recent trial we asked all of the IRS agents if any of them had ever read the entire tax code. Not one had. With thousands of forms and tens of thousands of pages of statutes, rules and regulations, it’s no surprise that individuals and business owners often need to seek the advice of tax lawyers or CPAs. Most of that advice is good but even professionals make mistakes. Kansas City Chiefs quarterback Kyle Orton and says that Chicago law firm Chuhak & Tecson made such a mistake and he is suing for millions of dollars.
Orton says he and other NFL players relied on the law firm for tax advice. According to the complaint, the players invested in a complex oil and gas deal that was supposed to offer tax credits. When the credits didn’t materialize, Orton sued. He claims that the lawyers were negligent and misrepresented the tax implications of the investment. He says he relied on their bad advice when making the investment.
Suits such as this are unfortunately common. Lawyers and accountants make mistakes. Even if the advice was bad, however, doesn’t automatically mean you can successfully sue your attorney. Lawyers and accountants do not usually make guarantees. To sue a professional, you often must prove that the standard of care was not met.
The good news is that most financial professionals have malpractice insurance. It does not hurt, however, to ask your tax professional if he or she is insured before you rely on their advice.
Orton is seeking to make his suit a class action complaint. His lawyers says that approximately 20 players were misled and that the losses stemming from the bad advice could reach $10 million. Let’s hope there is enough insurance coverage in case they are found to be negligent.
Chuhak & Tecson has not yet released a public statement to our knowledge. According to their website, they employ some of the lawyers in Chicago.
Orton’s losses were caused by supposed bad investment and tax advice. Accounting malpractice isn’t limited to bad investment decisions, however. Financial professionals can also make many other mistakes. Presently we are seeing a wave of litigation caused by the disallowance by the IRS of most section 419, 412 and other welfare benefit plans. Many lawyers and accountants “blessed” these transactions without knowing that the IRS calls these plans abusive tax shelters.
If you believe you suffered a financial loss of $250,000 or more, call us. Anywhere in the U.S., we can probably help. Most cases can be handled on a contingent (“success”) fee basis.
For more information, contact attorney Brian Mahany at (414) 704-6731 (direct) or by mail at All calls are strictly confidential.
Mahany & Ertl – America’s Fraud Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan and Portland, Maine. Services available in most cities and states.