POA to file tax return/statute of limitations

[Sabre]

New client first meeting this pm.

Client gave a power of attorney for a CPA to file an amended 2006 personal tax return for an anticipated refund of $400,000 plus back in 2009. Communications broke down between the client and the CPA but the bottom line is no refund has been received and apparently the client recently learned the amended return was never filed. New client has indicated he wants to pursue this with the IRS using the relied on a professional as the reason for failure to file. My basic take on this is that it will be a blue day in hell before the IRS is going to cough up a refund that is this outdated for whatever reason. I suggest if he has sufficient documents his only recourse is against the CPA.

Your thoughts?

[ATSMAN]

You are correct.

This taxpayer may have a claim against the CPA for malpractice if he can prove it. I doubt it though.

In my own practice many clients will casually say that they want to amend a prior return because they found new expenses that they did not claim etc. BUT they never actually provide any documentation, and ignore e-mails.

[JohnH]

I know I'm sometimes too quick to send 'em packing, but this smells to high heaven. A $400K refund and nobody got around to doing anything about it? The client didn't bother to even bug the CPA about following through?

If it's a legitimate claim, this is a sure-fire lawsuit and the client may as well start out with a good tax attorney. If it's a bunch of wishful thinking and flaky tax planning, then you're going to find yourself in the middle of a huge mess you'll never be able to separate yourself from. Personally I'm not sure I'd have even taken the meeting. But if I did, then I suspect it would be over in about 15 minutes.