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ARTICLE ID 9176

$________ Accounting Malpractice - breach of contract - plaintiff allegedly provided erroneous tax advice regarding sale of his business and tax consequences of selling the assets and liquidating business - plaintiff forced to pay additional taxes.

FULTON County, GEORGIA

The plaintiff filed suit against the defendant Big Eight Accounting firm, alleging that the defendant had committed professional negligence and breached its contractual duties by providing him with erroneous tax advice regarding the sale of his business and the tax consequences of selling the assets of the company and liquidating it under Section ________ of the Internal Revenue Code.

The plaintiff alleged that the taxes which actually had to be paid were over $________ more than the defendant had advised and that the additional taxes could have been avoided with proper advice prior to the sale, or at the time the value of the assets was allocated for tax purposes. Specifically, the plaintiff contended that the defendant had failed to warn him that the bargain purchase element of the company’s LIFO inventory system would have to be recaptured and that the defendant had advised him that the tax resulting from the LIFO recapture would be approximately $________, when it actually was in excess of $________.

The defendant claimed that its tax accountants had advised the plaintiff generally about LIFO recapture, but that it provided no figures and that the plaintiff never asked for quantification.

The defendant further alleged that the additional taxes could not have been avoided. The jury found for the plaintiff.

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