Thursday, January 5, 2012

I Don't Want to Hear About It

Many people want to tell their accountant things they shouldn't. It is true accountants have limited privilege with clients. Certain matters you tell an enrolled agent or CPA remains confidential and your tax professional cannot be used against you in an audit or in court in certain instances. The key word though is "limited." Now is a good time to review what is and is not covered by privilege with an enrolled agent or CPA.

Accountant-client privilege only extends to noncriminal tax matters before the IRS. In state court, accountant-client privilege cannot be asserted. If you are engaged in tax fraud, your accountant can be compelled to testify against you. What is always confidential is any tax inquiry you make. If you want to explore ways to reduce your taxes, the discussion is covered by privilege.

Your accountant is subject to fines and prison is he knows you cheated on your taxes and signed the tax return anyway. So let me say this as clear as possible: I don't want to hear about it.

By the way, you will sleep better at night if you follow the rules, anyway.

1 comment:

  1. ya absolutely clients should have faith on their accountant and of course once you are related to accounting , you must not cheat anyone.