Document Type
Article
Publication Title
The Journal of Corporation Law
Publication Date
Winter 2003
Volume
28
First Page
259
Abstract
(Excerpt)
This Article explores the answer to what seems to be a simple and straightforward question, a question one would expect to have a relatively simple answer. The question is whether damages may be recovered from a negligent issuer of an incorrect federal tax information return? If one receives a form W-2 that overstates the wages received, or if one receives a form 1099 that overstates the amount of interest or dividends received and the recipient is damaged as a result, assuming negligence by the issuer, does a suit for damages lie under state law? While at first blush the issue seems to be very elementary, almost a trivial question concerning the application of rather basic principles of tort law to a specific situation, the ramifications are much more significant. In today's business climate in which large corporations such as Enron, WorldCom, and others issue false financial reports, and the wealth and retirement assets of many thousands of individuals disappear overnight once the fabrication becomes known, it is important to know whether basic principles of tort law apply to assure that businesses are responsible for the accuracy of their information.