Most accountants perform at least some tax work, so it's not surprising that the majority of professional liability claims against accountants are in the tax arena. "The higher-dollar claims against accountants are in the financial statement area, but the opportunity for tax claims is greater," said Ron Parisi, of Orchard Accounting and a former insurance company executive. "But there are a lot of 'black and white' errors. The consequences and penalties can be calculated almost immediately, as opposed to the true value of damages on fraud and audit. The legal concept of 'proximate cause' can link damages with the breach easier on tax than in audit cases."
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