They would need to prove they suffered loss (and an actual error!). That's not clear in this situation. Not paying taxes you were due isn't extra costs due to your accountant, although fines and interests may be.

So it doesn't work like this?

A: Hey B, how do we have to set up our company/foundation so this doesn't blog up and we have to pay non-sensical taxes only because of the way we are set up?

B: Do it this way: ...

(later)

Z: A, you have to pay taxes because your setup is strange and makes no sense to our rules.

B: Damn, we're liable for the bad advice we gave...

(honest question)

No.

Legally, the hired professional is an advisor. The board/management are collectively responsible for picking a good advisor and double-checking his/her recommendations.

Bottom line: no one takes responsibility for anything (unless they're on the board) and you are on the hook for everything.

This also applies to lawyers, property professionals, medical professionals, engineers, architects, and so on.

Of course this is outrageously unfair, but the reality is that winning compensation for incompetence and malpractice is incredibly hard and expensive - and most professional contracts include explicit disclaimers of responsibility in an attempt to make it even harder.

There's no reason why this is outrageously unfair. An external consultant is only held to an advisory standard because they are external - they are not party to the detailed nuances that management may have inadvertently or deliberately concealed.

It's outrageously unfair because when you hire an advisor you typically know so little about their domain of expertise you have no idea what questions to ask them.

So you have no effective oversight over the quality - or otherwise - of their work.

Of course you can hire another professional to double check the advice of the first professional, but that soon gets expensive, you're pretty much guaranteed some angry muttering, and you're still not guaranteed a reasonable outcome.

It's a remarkable fact that consumers have more rights when buying a toaster than when hiring an accountant or lawyer - and the toaster is going to be more reliable, and much less expensive to run.

Sounds like what they should have gotten was "audit insurance". IDK if such a thing exists, but if it does I'd think you could reduce your premiums if you can prove your risk is low (by providing documentation, or by getting sign-off by a 3rd party tax accountant).

Point is, I'd want to pay money to remove my liability, not just reduce its likelihood.

They say the money made by the developer is only due because of iffy status of the Foundation, and now the income is tax free. So it seems that the taxes due were because of the accountant advice on the structure of the Foundation - unless the sales started later, or the laws changed in between.

That's a fair point. Still won't be easy to actually come out on top when litigating, though.