If a financial adviosr error caused the IRS to impose a substantial penalty, do I have to pay it?

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usaHIguy2
usaHIguy2 Member Posts: 1 Newcomer
edited January 15 in After you file

A close friend recently related that after she submitted her deceased mother's final tax return she had to pay a large penalty ($97,000) due to her financial advisor's error. She has not contacted the IRS about it yet. I was wondering whether or not she has a good chance of having it set aside or reduced considerably if she contacts the IRS ASAP becasue it's affecting her (single mom/2 kids) financially.

Thanks for your input.

Kerry L.

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  • AlexO
    AlexO FreeTaxUSA Agent Posts: 74
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    Hello, usaHIguy2!

    That is a great question!

    Legally, even if due to a financial advisor's error, your friend may need to pay the penalty. I do recommend reaching out to the financial advisor. Many times, advisors or CPAs have insurance to help cover certain errors.