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Beit Midrash Series P'ninat Mishpat

Chapter 390

Switching Accountants Due to Slow Results

The plaintiff (=pl) provides tax refund services, and the defendant (=def) used him originally to his satisfaction. For tax year 2009, he requested a major refund, due to receiving severance pay from three sources and becoming self-employed. The tax authorities’ (=mas hach) ruling was greatly delayed. Finally, the refund was rejected, mas hach demanded payment, and they froze def’s bank accounts when he did not pay. Def turned to his new accountant for his business, and several months later received a refund of 18,000 shekels. According to pl, the new accountant complicated his ability to expedite the request because pl no longer was able to communicate with mas hach as the legal representative and receive needed materials. That, along with the request’s complexity, explained mas hach’s delay. Pl claims that based on their old signed contract, def owes him 25% of the discount (4,410 shekels) plus penalties for late payment as stipulated in the contract), even if def asked someone else to continue the work. The fee is justified because pl receives nothing if there is no refund. Def claims that he is not contractually obligated because he did not sign on a contract for 2009, and his accountant could have done it for much less money. He had asked to end pl’s work, and he agreed to continue only because of pl’s pleas and promises until he could wait no more. Def’s accountant explained that pl acted ineffectively, including that he did not physically visit mas hach.
Various RabbisKislev 4 5777
63
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(based on ruling 74051 of the Eretz Hemdah-Gazit Rabbinical Courts)
P'ninat Mishpat (575)
Various Rabbis
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Case: The plaintiff (=pl) provides tax refund services, and the defendant (=def) used him originally to his satisfaction. For tax year 2009, he requested a major refund, due to receiving severance pay from three sources and becoming self-employed. The tax authorities’ (=mas hach) ruling was greatly delayed. Finally, the refund was rejected, mas hachdemanded payment, and they froze def’s bank accounts when he did not pay. Def turned to his new accountant for his business, and several months later received a refund of 18,000 shekels. According to pl, the new accountant complicated his ability to expedite the request becausepl no longer was able to communicate with mas hach as the legal representative and receive needed materials. That, along with the request’s complexity, explained mas hach’s delay. Pl claims that based on their old signed contract, def owes him 25% of the discount (4,410 shekels) plus penalties for late payment as stipulated in the contract), even if def asked someone else to continue the work. The fee is justified because pl receives nothing if there is no refund. Def claims that he is not contractually obligated because he did not sign on a contract for 2009, and his accountant could have done it for much less money. He had asked to end pl’s work, and he agreed to continue only because ofpl’s pleas and promises until he could wait no more. Def’s accountant explained that pl acted ineffectively, including that he did not physically visit mas hach.

Ruling: Def signed a contract in 2007 that included the conditions plclaimed. Therefore, when def asked pl to work on the 2009 taxes and he started working, it made their agreement binding, including that he cannot back out in the middle of a refund request for a given year.
Beit din went over the correspondences between the sides andpl’s seemingly authentic log of activity on def’s file. Clearly, pl put in significant effort over time on the request. We also have not seen signs that pl, who is an established professional, did not fill out the forms correctly. Def’s accountant corroborates that the request was a complicated one, in which case, initial failure does not prove that there was mishandling. However, despite imperfect communication betweendef and pl, pl’s lack of proper guidance after the request’s initial rejection contributed to the fact that def’s bank account was frozen. In order to determine clearly the effectiveness of pl’s efforts, we would have to hire an expert, but the expense is illogical for a claim of this size.
We conclude that while def has not provided sufficient grounds to deny paying pl’s fee, there are sufficient grounds for dissatisfaction to employ a peshara hakerova ladin. We note also that pl agreed to some sort of lowering of her fee in this case. Certainly we will not award plfines for def’s failure to pay to this point.
According to one of the dayanim there is another reason to reduce the fee. Pl claimed that matters were hindered by the presence of two accountants for the same client. However, pl did not inform def in advance of this fact, and therefore there are grounds to claim that employing pl in 2009 was a mekach taut.
Def is obligated to pay pl 3,500 shekels.




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