Question
Eagle has an accountant, John Steinbell, prepare its financial statements and to prepare the tax returns. While the financial statement show a profit for the
Eagle has an accountant, John Steinbell, prepare its financial statements and to prepare the tax returns. While the financial statement show a profit for the company, John takes a very aggressive stance in allowing expense deductions from income, resulting in the company showing a significant loss on the tax returns for two years. After Eagle is audited by the Internal Revenue Service, the IRS does not allow many of the deductions and charges Eagle not only for the tax owed but also significant penalties. The Eagle owners are furious with their accountant. Do they have a cause of action against him? Please explain.
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