Joseph and Amy McKenny sued their accountants for
malpractice based upon faulty tax advice, settling for $800,000. The
settlement, however, did not end their legal problems, as they wound up
litigating with the federal government over the tax treatment of the

The story began when Mr. McKenny hired Grant Thornton to advise him on the best structure for his consulting business. McKenny v. United States, No. 18-10810, 2020 U.S. App. LEXIS 27754, *2 (11th Cir. Sept. 1, 2020). Grant Thornton offered a plan that had two basic components: Mr. McKenny’s consulting business would be organized as an S Corporation, and its stock would be owned by an employee stock ownership plan with Mr.… Read More