Can you sue your tax preparer or accountant?

Yes, a client can bring a legal claim against a tax preparer, CPA or other accountant whose mistake caused a real loss. These claims are usually called accounting malpractice or professional negligence, and some are brought as breach of contract. Not every mistake leads to a claim, though. Whether yours does is something an attorney decides, usually with help from an independent accountant who reviews the work.

This guide explains what these claims generally involve, who can bring one, and what to think about early. For the first practical steps after you find a mistake, see Your accountant made a mistake: what to do next. Where a rule comes from state law, we name the state. Rules differ from state to state.

What a claim against an accountant generally involves

Every state has its own law, but claims against a professional usually turn on a few questions:

1. Was there a professional relationship? Usually an engagement: you, or your business, hired the preparer or firm to do specific work.
2. Did the work fall short of the standard it should have met? This is about what a reasonably careful professional would have done in the same situation, not whether the result was disappointing.
3. Did that shortfall cause a loss? The loss has to come from the mistake, not from something that would have happened anyway.
4. Is there an actual loss? A mistake that was caught and fixed at no cost is different from one that led to penalties, extra costs or a missed opportunity.

For federal tax work, there are written standards too. Attorneys, CPAs, enrolled agents and others who practice before the IRS “must exercise due diligence” in preparing, approving and filing tax returns (31 C.F.R. § 10.22(a)). That rule governs their duties to the IRS. Whether it matters in a lawsuit between you and your preparer is a question of state law that an attorney can answer.

The same federal rules say a practitioner “generally may rely in good faith without verification upon information furnished by the client,” but may not ignore the implications of what the client gave them or what they actually know, and must make reasonable inquiries when information looks incorrect or incomplete (31 C.F.R. § 10.34(d)). So one of the first questions in any review is what you gave the preparer, and what they did with it.

A mistake isn’t always malpractice

People often ask about situations like these:

• a return filed with the wrong numbers, or missing income that was reported on a Form 1099;
• a return that was never filed, or was filed late;
• advice about a transaction, a deduction or a business structure that turned out to be wrong;
• bookkeeping errors, or payroll taxes that weren’t paid on time;
• an audit or financial statement that missed a serious problem.

Each of these can be the start of a claim, or it can turn out to be an honest judgment call, a problem caused by missing information, or an error with no lasting cost. An attorney and an independent accountant look at what was asked, what was provided, what was done, and what it cost.

Keep your own role in mind as well. The IRS says that you’re “generally responsible for complying with tax law even if someone else handles your taxes,” and that you should know what your tax preparer files and get proof that your return or payment was sent on time (IRS, Penalty relief for reasonable cause). That doesn’t mean a preparer is never responsible. It means the IRS will usually deal with you first, and any claim against the preparer is a separate matter.

Who can bring a claim

The person or business that hired the accountant is the usual claimant. State law can limit claims by people who weren’t the accountant’s client. Two examples:

• Florida. Florida’s two-year time limit for professional malpractice, other than medical malpractice, “shall be limited to persons in privity with the professional” (Fla. Stat. § 95.11(5)(b)). Privity generally means a direct relationship, such as a contract.
• Illinois. Licensed accountants and firms aren’t liable to people “not in privity of contract” with them, except for fraud or intentional misrepresentation, or where the accountant knew a primary intent of the client was for the work to benefit or influence the person bringing the claim. If the accountant identifies in writing who is meant to rely on the work and sends them a copy, liability to non-clients is limited to those people (225 ILCS 450/30.1).

If you own a business, the business is often the client, not you personally. Lenders, investors and buyers who relied on financial statements are in a different position from the client. An attorney licensed in your state can tell you who the law treats as the client.

What losses an attorney looks at

An attorney will want to separate the costs that came from the mistake from the costs you would have had anyway. People commonly ask about:

• IRS or state penalties and interest that the mistake caused;
• the cost of having another professional fix the returns or books;
• tax benefits or refunds that were lost because a deadline passed;
• business harm, such as a loan, sale or deal that was affected.

Whether any of these can be recovered depends on state law and the facts. An attorney will also ask how the tax itself would have come out if the work had been done correctly. Separately, the IRS considers whether you relied on a competent advisor and gave them the information they needed when it decides some penalty relief requests (IRS, Penalty relief for reasonable cause). Our tax preparation errors guide explains how penalty relief and preparer errors fit together.

Engagement letters, service terms and tax software

Read what you signed or accepted

If you signed an engagement letter or accepted service terms before the work started, look for:

• what work the preparer agreed to do, and what was left out;
• any promise about paying penalties or interest caused by the preparer’s own error, and any time limit for asking;
• whether disputes go to arbitration instead of court.

Under federal law, a written agreement to arbitrate disputes arising out of a contract involving commerce is generally “valid, irrevocable, and enforceable,” except on grounds that would allow any contract to be revoked (9 U.S.C. § 2). An arbitration clause affects where and how a dispute is decided. An attorney can explain how a clause like this applies to you.

If you prepared the return yourself with software

A return you prepared and filed yourself with software is treated differently from one a paid preparer prepared. For example, the IRS tells taxpayers who electronically filed their own return with tax software not to use its preparer-misconduct affidavit (IRS, Tax return preparer misconduct). Any dispute with a software company usually runs through the terms you accepted when you used it.

Time limits are short

Claims against accountants have their own deadlines, and they can be short. Three examples:

• Florida: two years for professional malpractice other than medical malpractice, whether the claim is based on contract or tort, running from when the cause of action is discovered or should have been discovered with due diligence (Fla. Stat. § 95.11(5)(b)).
• Illinois: two years from when the person knew or should reasonably have known of the act or omission, and no more than five years after it happened. There is a separate two-year window after an income tax assessment or the end of a criminal prosecution for a claim against the accountant who prepared the return (735 ILCS 5/13-214.2).
• New York: three years for malpractice other than medical, dental or podiatric malpractice, “regardless of whether the underlying theory is based in contract or tort” (N.Y. C.P.L.R. § 214(6)).

Other states set different periods and start the clock at different times. Arguing with the preparer, waiting for the IRS to finish, or filing a complaint with a licensing board doesn’t necessarily pause the clock. Talk with an attorney licensed in your state early, even if you’re still sorting out the tax side.

What to gather before you talk with an attorney

You don’t need to prove anything yourself. It helps to have these together, in date order:

• the engagement letter, service terms or any written agreement;
• the returns or reports as they were filed or delivered, and any corrected versions;
• every IRS or state notice, with its envelope;
• emails, texts and letters with the preparer, including anything they said about the mistake;
• invoices and proof of what you paid to fix the problem;
• a short timeline: when the work was done, when you learned something was wrong, and what happened next.

If the preparer still has your records, federal rules require practitioners to promptly return client records needed for your federal tax obligations when you ask, generally even during a fee dispute (31 C.F.R. § 10.28). Keep your originals and share copies with your own attorney. For how our service connects people with participating attorneys, see how it works.

Sources and corrections

We wrote this guide from the primary sources below and checked it against them on September 27, 2026.

• 31 C.F.R. § 10.22: due diligence by practitioners
• 31 C.F.R. § 10.34(d): relying on information from clients
• 31 C.F.R. § 10.28: return of client records
• IRS, Penalty relief for reasonable cause: the taxpayer’s responsibility when someone else prepares the return
• IRS, Tax return preparer misconduct: self-prepared returns and the misconduct affidavit
• Fla. Stat. § 95.11(5)(b): Florida professional malpractice time limit and privity
• 225 ILCS 450/30.1: Illinois accountant liability to non-clients
• 735 ILCS 5/13-214.2: Illinois time limits for claims against accountants
• N.Y. C.P.L.R. § 214(6): New York time limit for non-medical malpractice
• 9 U.S.C. § 2: enforceability of written arbitration agreements

We are not attorneys, and this guide is not legal advice. Laws change and differ from state to state. If anything here is out of date or wrong, email support@malpracticeattorneys.com with the page name, and we’ll review it and update the page.