Accountant forgot to file an extension (Fed and State) for my aunt's estate

wrote

You can ask that any penalty for late filing be waived or abated, due to your reliance on the accountant filing the extension. I trust the facts and circumstances point to that as a fact. It might help - might not.

In the UK the penalty would stand and the client would expect the accountant to pay it.

"Peter Saxton" wrote

That's pretty brazen when it's possible that the extension ~was~ filed in a timely manner and it was misprocessed or lost by the tax agency.

Sure but in this case it was stated that the accountant forgot. Certified mail is the way to go, especially on close deadlines. Then, at least, you have proof of when and where it was sent.

This would really depend on the circumstances.

If there was some sort of "agreement" that he would do this for you, that's one thing. But if you think it just happens "automatically" if you don't show up in time to get your taxes done, that's something else.

In effect, if you engaged the CPA to insure that your extension was timely filed, he may have some liability. But just having had him do your taxes in prior years, or dropped off part of your work without following up, or something like that, it is your responsibility, not his.

I'm sure there could be two sides to this story.

Also, your penalty is a function of your underpayment. Had you paid the amount due with the extension, you wouldn't have had the problem at all.

I don't practice anymore, but when I did, if there was any chance someone had a substantial balance due, it was my practice to "estimate" a balance due of some amount, whether $100 or $1000 or whatever, and have the check sent in with it. This solves several problems, the most important of which that it provides a proof of timely filing of the extension since the payment was included with the extension and the check was cashed by IRS.

My clients would be horrified at the thought of paying any tax that they were not 100% certain is correct!

They prefer to ignore my requests for information and then wait until a few days before the filing deadline and assume they are the only one doing so. They also assume that no new clients turn up with a pile of letters going back a year asking them to submit tax returns. I've got three clients who are now being threatened with 60 pounds a day fines PER TAX RETURN and still they are slow to respond.

That is an accurate description of general human avoidance behavior. If you read history you see it turning up time and again. Considering how people really behave I consider the folks who bring in the FIRST LETTER to be gems who are to be retained on the client list at all costs.

It is nice when you have a practice growing at a good enough clip so you can convince the tree you have mentioned seek services else where............

How many accountants do sack clients? I think the vast majority of us have plenty of work and plenty of growth but we don't sack clients. A better option may be to give clients a good service and increase prices.