With tax season upon us, tax professionals may cringe at another example of the potential for malpractice arising from questionable tax advice. However, America’s Oldest Brewery is in the midst of a very public dispute with the City of Brotherly Love regarding allegedly unpaid taxes. The City of Philadelphia recently sued Yuengling in an attempt to recover $6.6 million in back taxes, interest, and penalties allegedly owed to the City. Although Yuengling is located outside of Philadelphia, the City contends that the brewery failed to pay a tax imposed on entities that regularly conduct business in the City. Yuengling has vowed to vigorously defend itself in this lawsuit.
Yuengling’s yet-to-be publicly identified tax professionals may eventually find themselves in the public eye as well. At some point, someone made the decision that the brewery was not obligated to pay the City. That decision is now being closely scrutinized and a professional malpractice claim may ensue.
It is impossible to prevent against all errors. However, a carefully documented file may provide a tax professional with a necessary safety net. This type of vigilant record-keeping will greatly benefit the professional if a decision is subsequently questioned. It remains to be seen whether the decision of Yuengling’s tax professionals met the applicable standard of care.