Will My Tax Attorney Tell on Me?
You may be wondering whether you can be honest with your tax attorney. Can you tell your tax attorney the truth? Can you tell your tax attorney the full story?
The answer is “yes,” you can and you should.
Communications between a client and their tax attorneys are protected by various privileges. The state attorney regulation and IRS confidentiality rules can also help ensure your information is kept private.
The Attorney Privileges
Communications with tax attorneys qualify for the attorney-client privilege and, for written communications between the client and tax attorney, the work-product privilege.
These privileges prohibit the tax attorney from disclosing confidential information in court. They also apply during IRS audits and attempts by the IRS to collect taxes.
Your tax attorney just asserts these privileges. You, as the taxpayer and client, have these privileges. It is your privilege to waive, if, how, and when you choose to do so.
Ultimately, these privileges prevent the government from compelling the tax attorney to testify against their client or product records in court or during an IRS audit or collection case.
The Federal Tax Practitioner Privilege
The rules for communications between a non-tax attorney and their clients is not as clear. This includes communications with accountants or other persons holding themselves out as tax practitioners.
Our tax rules include a federal tax practitioner privilege. This type of privilege has several limitations. For example, it cannot be asserted in a criminal tax case–whether at the administrative or the court level. It also excludes certain written advice.
The nuances of this privilege have not been fully tested. So the jury is still out on how much protection is provided by this privilege.
State Professionalism Rules
Out of court, licensed tax attorneys and certified public accountants are prohibited from disclosing confidential client information by way of local rules of professional conduct and professionalism rules. These rules are enforced through local bar ethics committees and state boards of accounting.
These rules generally prohibit the disclosure of all information provided to the tax attorney (1) that is not necessary for the representation of the client, (2) information that is not likely to result in imminent and substantial bodily injury to a third party, and (3) information used to defend the tax attorney against a civil lawsuit filed by the client or a criminal suit brought by the government against the tax attorney.
The penalty for a licensed attorney or certified public accountant disclosing confidential client information can be quite severe–including suspension or disbarment from practicing law or holding them out as a certified public accountant.
IRS Disclosure of Confidential Information
You may also be worried about your tax attorney providing information to the IRS and whether the IRS will keep it protected.
The tax code imposes strict confidentiality rules for IRS employees. These rules help ensure that your information is kept private.
Experienced Tax Attorneys
If you have additional questions about whether you can or should disclose information to your tax attorney, please discuss the topic directly with your tax attorney.
We are experienced tax attorneys located in Houston, Texas. We help clients with IRS problems. We also advise clients about client confidentiality questions.
Please call us at (713) 909-4906 or schedule an appointment to see how we can help with your IRS problem.