Professional Negligence Law Reporter
Accounting
You must be a Professional Negligence Law Reporter subscriber to access this content.
If you are a member of AAJ's Professional Negligence Section or a subscriber, log in below. Not yet a Section member? Join today!
Join the Professional Negligence SectionAlready a subscriber? Log in
Negligent preparation of tax returns
November/December 2022A.R. Green & Son contracted with accounting firm Pignatare & Sagan L.L.C. to prepare and file tax returns required by the IRS and the Commonwealth of Massachusetts. From 2004 to 2013, Pignatare included sales tax in A.R. Green’s returns, despite the fact that the firm also had instructed Green to pay sales tax on a monthly basis. Pignatare also instructed Green to pay the sales tax with its year-end filings. In 2016, when Green retained a new accountant, it was discovered that the company had overpaid sales tax in its 2004 to 2013 filings. The state refused to refund any portion of the overpayment before 2013. As a result, A.R. Green suffered more than $736,700 in financial loss.
A.R. Green sued Pignature & Sagan, alleging negligence. Pignature countersued for breach of contract.
The jury awarded approximately $764,200, finding A.R. Green 35% at fault. The court also awarded Pignature & Sagan $38,000 on its breach of contract claim.
Citation: A.R. Green & Son, Inc. v. Pignatare & Sagan, LLC, No. 1779CV00561 (Mass. Super. Ct. Hampden Cty. May 18, 2022).
Plaintiff counsel: Jeffery S. Bohnet, Palmer, Mass.
