PHILADELPHIA – A Philadelphia food service company claims it was left on the hook for over $70,000 in local, state and federal back taxes, when its accounting firm negligently and erroneously prepared its tax return paperwork.
Waterfront Gourmet Corporation of Philadelphia filed suit in the Philadelphia County Court of Common Pleas on Feb. 27 versus Creative Business Accounting & Tax Service, LLC, and its partners/employees/accountants Karen Overton and Tamara Ali Bey, all of Philadelphia.
The plaintiff is in the food service and catering industry, according to the litigation, and maintains three locations in Philadelphia, while the defendant is an accounting and tax firm, which solicits customers to utilize and purchase its services for profit.
On Dec. 12, 2013, Waterfront Gourmet retained Creative Business to handle all aspects of its bookkeeping, accounting and reporting for all state, local and federal taxes. Therefore, Creative Business would request documents, records and receipts from Waterfront Gourmet, to prepare necessary tax filings with each government entity, and the plaintiff says it provided them – Waterfront Gourmet relied on Creative Business’s expertise in the accounting field and paid them accordingly.
“On or about May 2016, plaintiff received notices from the City of Philadelphia, the Pennsylvania Department of Revenue and the Internal Revenue Service, all informing plaintiff that there were numerous back taxes owed to the City, the Commonwealth, and the federal government. After consulting with defendants, it became apparent that defendants had neglected to account for Pennsylvania state sales taxes in preparing and filing plaintiff’s returns from Third Quarter 2014 through Third Quarter 2016. The May 2016 notice was the first time that plaintiff became aware of defendants’ negligence,” the lawsuit reads.
Due to this alleged negligence, the plaintiff says it was then responsible for paying a grand total of $70,380.44 in back taxes, interest, penalties and other costs. Penalties for the delinquent payment were $23,642.04, interest was $2,461.55 and other costs were $44,276.85. This resulted in the plaintiff having to take loans and borrow funds to pay the back taxes, interest and penalties owed to the City of Philadelphia, Commonwealth of Pennsylvania and the IRS.
As defendant Bey allegedly admitted the defendants failed to follow accepted accounting standards, breached their duties to the plaintiff and promised to repay the outstanding costs, the plaintiff says it delayed filing suit for several months and took a loan to pay interest and late fees during the months Bey allegedly prepared to repay plaintiff – a payment which it says never came.
For counts of professional negligence, unjust enrichment and promissory estoppel, the plaintiff is seeking damages not in excess of the arbitration limits, for all compensatory, consequential and other damages, as well as delay damages, interests, costs, and such further relief as the Court may direct.
The plaintiff is represented by Austin R. Freundlich, Gregory C. Littman and Jonathan D. Rosenau of Freundlich & Littman, in Philadelphia.
Philadelphia County Court of Common Pleas case 180202788
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at firstname.lastname@example.org