Chapter 3: How to Avoid Lawsuits from Small Business Clients
Part 3: Quality Control: The Importance of Double-Checking Your Work
Anyone can make a simple error — a fact famously demonstrated by the loss of the Mars Climate Orbiter after a team of engineers used English units instead of the metric system. But it wasn't just the error that caused the malfunction; it was the lack of review that cost NASA $125 million.
You're probably not under quite the same pressure as rocket scientists, but exacting standards and deadlines can be stressful in any field. When tax time comes barreling down and you're drowning in work, it can be all too easy to rush a job and accidentally file incorrect tax returns.
Unfortunately, a simple mistake could cost the client a small fortune. That's more than enough to sour a relationship and lead to a lawsuit. For example, Kevin Durant sued his former accountant over deducting personal expenses as business expenses. Another thing to keep in mind is that mistakes can trigger fraud allegations from the IRS , leaving a client with no recourse but to sue you over the mistake.
Take the time to check and review your work so things are aboveboard from the start. This may require your client's cooperation, so let them know it's for their own good.
Lastly, don't believe yourself to be above an occasional error. It happens to the best of us.
A simple mistake like deducting personal expenses as business expenses led to a high-profile lawsuit against an accountant.
Next: Part 4: Avoiding Lawsuits by Managing Emotions and Egos