FORT MYERS — A Naples man has filed a federal lawsuit against a Missouri-based accounting firm and three of its principals, alleging professional negligence that he claims resulted in more than $3 million in tax overpayments, penalties, interest and future tax liabilities.
Kevin Knasel, a resident of Collier County, filed the complaint Feb. 2 in the U.S. District Court for the Middle District of Florida, Fort Myers Division, against SFW Partners, a Missouri limited liability company licensed as a certified public accounting firm.
Also named as defendants are Stephen R. Shapiro, Richard M. Flom and Lance G. Weiss, who are identified in the complaint as Missouri residents.
According to the complaint, the court has jurisdiction because the amount in controversy exceeds $75,000 and the parties are citizens of different states. Venue is listed as proper in the Middle District of Florida because a substantial part of the events and damages allegedly occurred in the district.
Knasel alleges that he engaged SFW Partners to provide tax and attest services, including preparing and filing federal and state tax returns, conducting audits and performing reviews for him and his related business entities.
The firm issued annual engagement letters and more frequent invoices that were paid upon receipt, the complaint states.
Although the engagement letters purported to limit the scope of services, Knasel contends that in practice SFW undertook responsibility for the full suite of tax services for all entities he owned.
He alleges that the firm holds itself out as having expertise in tax strategy, compliance and attest functions, and that he relied on its specialized knowledge because he did not maintain expertise in those areas.
The complaint alleges that SFW breached its professional duties through repeated instances of negligence, including failing to timely complete services, misdirecting communications, improperly calculating and communicating estimated tax obligations, incorrectly reporting ownership percentages, failing to provide certain tax strategies related to gratuitous transfers, failing to properly report and include business entities on tax returns and failing to timely file tax returns.
In the aggregate, those failures allegedly resulted in substantial penalties, overpayments and exposure to additional liability.
One entity referenced in the complaint is Branson’s Nantucket, described as one of Knasel’s affiliated entities.
Knasel alleges SFW was engaged to perform audits and prepare related federal tax filings for the company but repeatedly misdirected audit-related communications and failed to complete an audit before a tax filing deadline.
The firm allegedly filed a draft tax return and later charged the entity for amendments, resulting in substantial costs and penalties that increased Knasel’s individual tax liabilities because of his ownership interests.
The lawsuit also focuses on SFW’s preparation of Knasel’s individual income tax returns and gift tax returns.
Beginning with the 2019 tax year, SFW was engaged to prepare and file his individual returns, the complaint states.
Knasel alleges that in preparing his income tax returns, SFW failed to include the operations of Everglades Investment and BTM Marketing on Schedule C, despite what the complaint describes as ample evidence of their existence and activity.
As a result, he claims his taxable income was overstated and that he overpaid approximately $482,005 in federal income taxes across the 2022 and 2023 tax years.
He further alleges he lost $90,895.91 in time value of money associated with those overpayments, calculated at an 8% interest rate beginning in October 2023.
After requesting an amendment to his 2022 return, Knasel contends that SFW failed to properly disclose the previously omitted entities on a statement to Form 8995-A, which is used to report the Section 199A deduction.
According to the complaint, the Internal Revenue Service gained discretionary authority to disaggregate businesses for purposes of computing the deduction because of the alleged failure to make proper disclosures.
The IRS allegedly exercised that authority, reducing the available deduction and causing Knasel to incur an additional $1.3 million in taxes and $313,000 in associated interest for the 2022 tax year.
In addition, the complaint alleges SFW prepared gift tax returns documenting three transfers of 10% nonvoting interests in Branson’s Nantucket to irrevocable grantor trusts.
Knasel claims the firm failed to apply valuation discounts permitted under IRS Form 709 instructions for lack of marketability or minority interest.
As a result, he alleges he lost more than $2.23 million in future gift and estate tax credits, equating to $895,954.40 in additional tax upon completion of any gratuitous transfer above the annual exclusion limit.
Knasel claims total damages in excess of $3,081,855.21, including overpaid federal taxes, additional taxes and interest, future estate taxes and lost time value of funds.
He is seeking judgment against SFW Partners for damages, costs and any other relief the court deems proper. He is represented by Stephen C. Schahrer and Alexander Rabinowitz of Boatman Ricci in Naples.
U.S. District Court for the Middle District of Florida, Fort Myers Division case number: 2:26-cv-00206
