When the accountant’s admission allows for the waiver of penalties for willful misconduct

Taxpayers who managed several companies had been subject to a tax audit, following whichadministration they had intentionally evaded taxes. The authorities then issued a tax assessment, imposing penalties for willful noncompliance.

The adjustments related to the failure to report funds held in the taxpayers' checking accounts, which amounted to several times the income reported by the taxpayers.

In court, however, the taxpayers submitted a statement from the accounting firm acknowledging that it had made errors in bookkeeping, which were the reason why the amounts recorded in the checking accounts had not been reported as income by the taxpayers.

They also drafted a settlement agreement providing for the payment of a sum in exchange for the waiver of claims regarding the accounting firm’s professional liability.

The Court finds that this evidence demonstrates that the taxpayers did not intend to evade taxes.

It therefore overturns the imposition of penalties for willful misconduct.

CAA Nantes, March 10, 2026, No. 25NT01637

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