Today TaxMama hears from Andy in Michigan, who asks. “If a tax preparer is handed a subpoena to have a lawyer review a clients tax returns and other material, what are the privilege and confidentiality rules in this situation?”
First thing you do is to call your attorney.
Rarely does a civil subpoena say you must drop what you are doing and turn over the files immediately. Generally for that kind of authority, there would have to be law enforcement officials present. Even then, I would hold them off until I called my attorney.
Sometimes though, if a criminal investigation unit of most law enforcement agencies is involved, you may find that they will push you out of the way and start their search. Regardless, make a formal objection, for the record – and call your attorney immediately.
If you are dealing with clients who are in conflicts (divorce, partner conflicts, legal conflicts, etc.) you should have an attorney you work with whom you can call about issues like this.
Or if you know you or one of your associates are engaged in illegal activities, you must have an attorney at hand! Better yet, sever the relationship – or stop the activity!
In general, for EAs and CPAs, they have client privilege with respect to IRS on non-criminal matters. This privilege does not extend to other jurisdictions. Read Circular 230 for more details on that.
And remember, you can find answers to all kinds of questions about tax professionals privilege and other tax issues, free. Where? Where else? At TaxMama.com[Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the subscribe link and join us.]
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