Tax Help FAQ: Are Conversations With My Tax Attorney or Accountant Privileged and Confidential?
A question that certainly many taxpayers ponder when considering seeking expert tax help. If should be no wonder that when it comes to taxes, the law regarding confidential and privileged information is rather complex. Read on to find out what kind of information is considered confidential.
A: There is no simple answer to this question. Certainly whether communications with your accountant are privileged or not may be at the heart of any court proceedings or hearings before the IRS. Some states recognize an accountant-client privilege while others do not. The federal government does not recognize a general accountant-client privilege.
Keep in mind that communication with your lawyer is always privileged and protected. This is one advantage to having a tax attorney rather than an accountant represent you before the IRS. The federally authorized Tax Practitioner Privilege law contained in the Internal Revenue Code provides that conversations between a taxpayer and a federally authorized tax practitioner are privileged as long as they took place between a taxpayer and his or her attorney. This exception is limited to federal tax proceedings and only to conversations with an attorney, CPA, enrolled agent, or enrolled actuary, not tax preparers or anyone else.
If you owe back taxes or need tax relief for other IRS problems, be aware that even where the privilege is recognized, there are exceptions. The privilege may be waived by even inadvertent disclosure to third parties or inclusion on a tax return. And you may have to disclose otherwise privileged communications if you end up suing your CPA.
If you would like to establish privileged communications regarding your tax issue, your safest route is to use a tax attorney to establish the well-recognized attorney-client privilege. If your attorney then contacts an accountant to help interpret or understand your financial situation, the communications between them will be privileged as well, as long as they are not disclosed to a third party, which will break the privilege. However accounting advice given by your attorney, or the simple preparation of a tax return by your attorney, will not be privileged.
As you can see, the law regarding privileged and confidential conversations with tax attorneys and accountants is rather complex. We recommended that those who need IRS help with back taxes, consult a Certified Tax Resolution Specialist.
Our Tax Relief FAQs section contains many more tax help tips, so check it out. Or refer to our archive of tax help articles and tax help blog, which are great resources for staying informed on the latest IRS news and offer tax relief advice for resolving debt with IRS tax relief options like the offer in compromise, IRS payment plans, and IRS audit resolution.
The Tax Help Glossary is a great tool if you’re one of many taxpayers out there who is struggling to understand the complex IRS terminology. Don’t let IRS jargon stop you from settling your IRS debt and permanently achieve your tax resolution.