Mills v. Garlow
In Mills v. Garlow, 768 P.2d 554, 557 (Wyo. 1989), the Supreme Court of Wyoming held that the statute of limitations in an action against an accountant for advice allegedly causing increased tax liability began to run when the taxpayer received statutory notice of the tax deficiency or, in the alternative, when the taxpayer registered agreement with the IRS.
The court noted that policy considerations supported this approach, including "the advantage of providing some certainty." Mills, 768 P.2d at 557.
The court also stated that commencing the statute at this point would not abrogate the policy underlying the statute of limitations of preventing stale claims "because, pursuant to 26 U.S.C. 6501(a) (1982), the IRS must file any notice of deficiency and assess the deficiency within three years from the date the tax return was filed, unless both the taxpayer and the IRS consent in writing to extend the assessment period. 26 U.S.C. 6501(c)(4) (1982)." Mills, 768 P.2d at 557.
The Mills court further noted that it is better policy to discourage the filing of lawsuits until such time as the likelihood of accountant error is established by the IRS at some point beyond the initial examiner's preliminary, conclusions.
The court explained, "We anticipate that this approach would also comport with the response of the average taxpayer to an examiner's proposed adjustments.
The first step by such a taxpayer, as in the instant case, is likely to be the contacting of the accountant for assistance in sorting out his tax difficulties with the IRS.
This effort would be frustrated if the taxpayer was required to immediately file a lawsuit against the accountant." Mills, 768 P.2d at 558.