“A person needs special training to know whether his tax return has been erroneously prepared”
How later courts described this case
- “A person needs special training to know whether his tax return has been erroneously prepared”
- recognizing discovery rule in action involving malpractice claim against accountant
- accountant malpractice suit arose when the plaintiffs received the IRS’s notice of deficiency
- cause of action against an accountant for negligent preparation of a tax return was held to accrue only after the receipt of deficiency assessment from the IRS
Written by the judges who cited it.
The opinion
HENDLEY, Judge (dissenting).
I respectfully dissent.
The issue to be determined on this appeal is the correct interpretation of § 23-1-1, N.M.S.A.1953:
“23-1-1. Limitation on time of bringing actions. — The following suits or actions may be brought within the time hereinafter limited, respectively, after their causes accrue, and not afterwards, except when otherwise specially provided.”
The same statute governed the identical question in Roybal v. White, 72 N.M. 285 , 383 P.2d 250 (1963), i. e. when does a cause of action accrue? The fact that the applicable statute in Roybal was § 23-1-8, N.M.S.A.1953 while in the instant case it is § 23-1-4, N.M.S.A.1953 is of no moment. The only relevant difference between the two is that § 23-1-8, supra, contains a three year limit while § 23-1-4, supra contains a four year limit. Further, the policy considerations in cases of medical malpractice are not dissimilar to those in cases of other types of professional malpractice. Firstly, most professionals are in a position of trust and confidence with respect to their clients. Secondly, the injury in most types of professional malpractice cases is often not ascertained until long after the negligent act or omission. See Annot, 80 A.L.R.2d 368 (1961).
In Roybal our Supreme Court held that the statute of limitations began to run at the time of the alleged wrongful act. The plaintiffs in Roybal urged upon the court, as do the plaintiffs here, the “discovery” rule. The court responded:
“We cannot supply what the Legislature has omitted. We are convinced that if the Legislature had intended the principle of discovery to apply to tort actions, it would have specifically so provided, as it did with regard to discovery in cases of fraud and in actions for injuries to or conversion of property, (citations omitted).”
See also § 23-1-7, N.M.S.A.1953, being one of the special provisions to which reference is made in § 23-1-1, supra.
The legislature has not yet seen fit to change the rule to one of “discovery” in cases other than those specifically enumerated in the statute at the time Roybal was decided. Nor has the Supreme Court altered the rule and we cannot. Alexander v. Delgado, 84 N.M. 717 , 507 P.2d 778 (1973).
The negligence herein alleged by plaintiffs is the single, irrevocable act of the defendants’ filing the 1963 tax return without taking advantage of certain optional elections. Likewise, in Roybal the alleged negligence was the single act of defendant’s leaving a sponge in plaintiff’s abdominal cavity. The two cases are thus distinguishable from E. O. Spurlin v. Paul Brown Agency, Inc., 80 N.M. 306 , 454 P.2d 963 (1969), where the defendant was in continuous breach of its duty to furnish plaintiff with liabilitiy insurance from the time plaintiff requested it until the time plaintiff became liable to a third person.
In addition, the date of injury in E. O. Spurlin coincided with the date of discovery of injury. The same can neither be said of the instant case nor the Roybal case. The plaintiffs, here, have been injured since April of 1964. While it is true that a taxpayer does not have to pay a deficiency assessment until he received notice thereof, the deficiency notice is merely a procedural device designed to inform the taxpayer that he has owed taxes since their due date. Its purpose is so that he can properly take an orderly appeal. Mertens, Law of Federal Income Taxation, Vol. IX, Section 49.126. It is not a new assessment of taxes never owing. It is a notice that taxes are past due. Hence, interest and penalties may be added. 26 U.S.C. Section 6155 (a). The plaintiffs have thus been injured since April, 1964.
I would therefore affirm the judgment below.