Tony visited his accountant, Alisha, to discuss his annual tax return. Tony typically would go to Alisha for his accounting needs. This year, however, Alisha is very busy and told Tony that her assistant Molly would help Tony out and that Alisha will do final check on the documents before filing them with the tax agency. Molly is not licensed to be accountant but can work if her work is under the supervision of licensed accountants. Alisha is a licensed accountant. Molly helps Alisha and several other accountants especially during the busy tax seasons. Molly works two days per week for Alisha and is paid hourly for her work. She does not receive any health or retirement benefits from Alisha. Alisha has provided general instructions to Molly as to how to do accounting tasks, but Molly generally works without day-to-day supervision of Alisha. Alisha typically reviews Molly's work at the very final stage before the documents are sent to the tax agency. Molly schedules appointments on her own and has her own clients, separate from what Alisha refers to her. Alisha sets the prices for services rendered and Molly cannot charge more than those fees. Molly can set the prices for the services rendered to the clients she herself brings to the firm.

Upon Alisha's referral, Tony met with Molly to work on Tony's tax returns. Molly noticed that she needs to review three preceding years of Tony's tax returns in addition to the current tax period. She offered Tony $2000 to this service. Tony was surprised by the low amount offered and immediately accepted. Based on Alisha's instruction, Molly should have offered $5000 for this service. Once the services were complete, Alisha send a bill for $5000 to Tony.

During Molly's review of Tony's tax documents in one of the days she was working for Alisha, she neglected to review some of Tony's important documents and therefore her audit was incomplete. Before submission, Alisha did a very cursory and quick review of Molly's work. As a result, the tax documents that were ultimately filed were not complete & were inaccurate. Tony suffered losses as a result.

Tony is unhappy about the $5,000 bill. He thinks he only needs to pay $2,000 as quoted by Molly. Discuss the extent of Tony's liability towards Alisha.

Also, Tony would like to bring an action against Alisha and Molly for negligence in filing his taxes. Discuss the relevant liability theories.

In your response discuss all relevant issues including the agency relationship, the type(s) of authority, direct, and vicarious liability for negligent conduct.

Please respond fully using the IRAC method. Make sure to identify all the issues, refer to all the relevant facts, and discuss all the relevant rules.