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in which there is a "unique degree of
trust and confidence between the par-
ties, one of whom has superior knowl-
edge, skill, or expertise and [thus] is
under a duty to represent the interests
of the other [party]." However, the Ap-
pellate Court then noted that, although
fiduciaries appear in a variety of forms
(e.g., agents, partners, lawyers, direc-
tors, trustees, executors, receivers,
and guardians), nonetheless, not all
business relationships necessarily rise
to the level of a fiduciary relationship.
The Court then focused on the specific
type of relationship that had existed
between the taxpayer and the defen-
dants. The Court concluded that it was
nothing more than the "usual interac-
tions between an accountant hired to
prepare annual tax returns and his or
her client," with the result that there
was no fiduciary relationship between
the taxpayer and his accountants.
Additionally, the Court stated that even
though there had been a long-term
professional relationship by the defen-
dants with the taxpayer and, moreover,
that although the defendants indisput-
ably had superior knowledge and skill
on tax matters in comparison with the
taxpayer, nevertheless, these facts did
not change the non-fiduciary nature of
the defendants' tax preparation ser-
vices. (Importantly, the Court did note
that if an accountant were to have
been engaged to go beyond tax prepa-
ration work and - for example - were
to manage a taxpayer's funds, then
the accountant would have a fiduciary
duty to the client.)
Therefore, because it was uncontested
that the defendants did not undertake
any financial management work for the
taxpayer, the Court limited the taxpay-
er's claims against the defendants to
a conventional professional malprac-
tice claim (viz.: for the alleged failure to
exercise that degree of care and skill
ordinarily and customarily provided
by certified public accountant firms in
preparing income tax returns).
The Court was not required to rule on
the malpractice claim due to the fact
that the three-year malpractice stat-
ute of limitations had already expired
prior to the filing of the lawsuit. Thus,
the case was dismissed.
Simply put, tax return preparers are not
fiduciaries to their taxpayer clients no
matter how long the professional rela-
tionship has been with the clients, and
regardless of the disparity in the level
of the knowledge, skill, and expertise
in tax matters between the clients and
their accountants.
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Philip H. Bartels,
J.D. is a member
of the Shipman &
Goodwin Litigation
Practice Group,
where he handles
matrimonial law,
charitable organization, and general
litigation matters. He is admitted to
practice in Connecticut and New
York. He is also a member of the
Connecticut and New York State Bar
Associations. He can be reached at
pbartels@goodwin.com.
Connecticut CPA
g
March/April 2013
13
Simply put, tax return
preparers are not
fiduciaries to their
taxpayer clients no
matter how long the
professional relationship
has been with the clients,
and regardless of the
disparity in the level of
the knowledge, skill, and
expertise in tax matters
between the clients and
their accountants.