John Kjar of Diamond Island Marina filed a professional malpractice case against Grabel, Schnieders, Hollman & Co., in Madison County Circuit Court Nov. 30, alleging his certified public accountant gave him lousy tax advice causing him to suffer damages in excess of $500,000.
According to Kjar, the suit stems from the firm's negligent misrepresentation and advice relating to income tax consequences regarding the transfer, surrender and deemed sale of land in 2004.
Kjar claims when he hired Grabel, Schnieders, Hollman & Co., he was negotiating a deal with Jersey State Bank about the potential transfer to the bank land known as the Nutwood and Fieldon Farms in connection with a debt he incurred at the bank.
"Defendant advised and assured plaintiff that there would not be any significant tax due on the proposed transfer of property to the bank if it was consummated," the complaint states.
Kjar claims based on that advice he signed a loan modification agreement with the bank which states he would convey the property in consideration for a credit to be applied to satisfy and reduce the notes he had with the bank.
"Plaintiff's concern before signing the loan modification agreement was that it would create a tax liability even though he would receive no cash," the complaint states.
According to Kjar, once the CPA firm realized their assurances were incorrect, they recommended that he consult with an attorney to consolidate some of his corporate entities to minimize the tax consequences.
He claims the firm was negligent in failing to recognize and advise him the transfer would result in significant income tax.
Kjar claims had he been advised of the proper advice that the transfer of property was a taxable event he would have chosen an alternate source of refinancing the property with the bank.
Kjar is represented by Mark Goldenberg of Edwardsville.