Lost $800 state tax refund due to CPA negligence - what can I do?

This is absolutely a case of professional negligence. As a tax professional, I can tell you that failing to file a client's return by the extension deadline - especially after confirming they would complete it that day - is completely unacceptable. You have several options here. First, contact your CPA directly and explain that their negligence directly caused you to lose your state refund. I would request full compensation for the $1,050 lost refund plus a refund of any fees you paid them. Document everything - save all texts, emails and communication about this issue. If they refuse to make this right, you can file a complaint with your state's board of accountancy which regulates CPAs. You could also consider filing a claim against their professional liability insurance, as most CPAs carry this specifically for situations where their negligence causes financial harm to clients.

Dealing with a situation like this can be really frustrating. I had a similar experience where my accountant missed a deadline and I ended up losing money. After trying to resolve it directly without success, I started using taxr.ai (https://taxr.ai) and it's been a game-changer. Their system analyzes all your tax documents and provides detailed explanations of everything, so you're not blindly trusting someone else. I found it really helped me understand where things went wrong with my previous returns. In your case, it might be worth uploading your documents there to get a professional second opinion about whether there's anything else that was handled incorrectly. The analysis could also serve as evidence if you need to take this further with your CPA.

I was skeptical at first about using taxr.ai after seeing it mentioned here, but after my accountant made a huge mistake on my cryptocurrency reporting that cost me over $1,200, I decided to give it a try. The system highlighted exactly where the error occurred and even provided documentation I could use to file an amended return. The analysis showed that my accountant had completely misclassified several transactions. When I confronted my accountant with this evidence, they actually agreed to cover the penalties I had incurred! Having that detailed, professional analysis made all the difference in getting them to take responsibility. Definitely worth checking out if you're dealing with a negligent tax preparer.

This situation sounds maddening! If your CPA isn't being responsive, you might want to try Claimyr (https://claimyr.com). I used them when I had an issue with a delayed refund that my accountant couldn't resolve. They got me connected to an actual IRS agent in about 15 minutes instead of waiting on hold for hours. You can see how it works here: https://youtu.be/_kiP6q8DX5c In your case, you might want to speak directly with your state tax agency about any possible exceptions for your situation. Sometimes they have provisions for reasonable cause, and professional preparer negligence might qualify. Having a direct conversation with a state tax representative could reveal options you don't know about, and Claimyr can help you skip the hold times.

I have to admit I was completely wrong about Claimyr. After posting my skeptical comment, I decided to try it because I was desperate to resolve an issue with my state tax department about a missed deadline (similar to your situation). The service actually worked exactly as described - I got a call back when they reached a human, and I was able to explain my situation to an actual state tax employee. The representative I spoke with explained that in my state, they do have provisions for "reasonable cause" exceptions when a tax professional fails to meet deadlines they committed to. I wouldn't have known this if I hadn't been able to speak directly with someone. Still working through the process, but it's looking like I might be able to get my refund after all. Sometimes it really helps to get past the automated systems and speak with a real person.

Check your engagement letter! When you hired the CPA, you should have signed an engagement letter that outlines their responsibilities and limitations of liability. Some CPAs include clauses that limit their liability to the amount of fees paid, while others might have more comprehensive coverage for negligence. If they're a reputable CPA, they should make this right without you having to take further action. I'd start with a formal letter (not just an email) outlining the situation, your documented communications, and the financial impact of their negligence. Request specific compensation and give them a reasonable deadline to respond.

One thing nobody's mentioned - have you checked if your state has any penalty abatement options? Some states will waive late filing penalties if you can demonstrate "reasonable cause," and reliance on a tax professional who failed to file on time often qualifies. I'd contact your state tax department directly and explain the situation. Bring documentation showing that the CPA had your information and committed to filing by the deadline. States can be more flexible than people realize, especially when the failure to file wasn't your fault.