Is it malpractice for CPAs to recommend their clients pay estimated taxes in light of the tax fraud epidemic? Here is a provocative article suggesting it might and it is generating a lot of discussion among lawyers and accountants. The issue is if you pay estimated taxes and someone steals your identity and files your return and gets your refund (which came from your estimated tax payments), would you have been better off not paying the estimated taxes?
I don’t believe it’s malpractice for accountants to advise their clients to do what the law requires (pay estimated taxes). On the other hand, clients may want to think through whether it’s better not to pay the estimated taxes and deal with the IRS penalty (if any) rather than risk identity theft.
What do you think?