We had to amend our 2011 and 2012 LLC tax returns due to errors committed by our original CPA. Since I was listed as the TMP (Tax matters person) in the LLC operating agreement will I be responsible for these errors? My partner is mad at me because of this and am scared he may take any legal action against me. The errors were discovered when my partner sought a second opinion from another CPA. I immediately agreed to amend both 2011 and 2012 LLC tax returns to rectify these errors.
Amending of LLC tax returns triggered amending of our personal tax returns.
Since the difference in taxable income is huge (40K for 2011 and 80 K for 2012) we had to pay taxes, penalty and interest.
I just amended my personal tax return this week. My CPA (not the original CPA who did the LLC return or the CPA that amended the LLC tax returns) filed the amended return for me and requested for abatement of penalty and interest.
Would IRS accept this? Would IRS impose additional penalty due to the huge tax bill (about $18K for 2011 and $25K for 2012)?
Will I be in trouble if my partner files a complaint with IRS or goes for litigation?