You may have wondered how private your information is when dealing with an attorney, certified public accountant, or enrolled agent. Each of these licensed professional is under ethical standards that are written by a state or federal governing agency.
Can My Tax Preparer Disclose My Tax Information?
It is true that they cannot ethically disclose any information about you or your tax return without first receiving permission. In some cases however they may actually be able to give out your information. These special situations include things such as subpoenas and being summoned to give testimony or evidence in regard to a certain taxpayer.
It is important to remember that non-licensed tax preparers are not held to the high standards that federal and state licensed tax professionals are. They are also not able to help you in regards to keeping your records confidential in some situations that a licensed professional would be.
Disclosure To Certain Individuals
A person who has prepared your tax return cannot give your information to a third party without your written consent. If they do they will be subject to a $250 civil penalty or a $1000 civil penalty and up to one year in jail for knowingly disclosing your tax information. These penalties however do not apply to disclosing your information to certain individuals.
If your tax preparer is asked by the IRS or one of its employees to disclose information about your return, they are not required to acquire your written consent. They are free to disclose any information about your tax return with the IRS and not be subject to any civil or criminal penalties.
There are a few other ways that your tax preparer can disclose your tax return information without your written consent. If a federal, state or local court asks about any information regarding your return, your preparer is legal allowed to hand it over to them. If a subpoena is issued by a federal or state grand jury your preparer may hand over information about your tax return without any type of written consent. Your tax return preparer may also be under the rule of a certain state or federal agency that regulates their licensing. If this state or federal agency requests information regarding your tax return, you’re preparer is not required to get written consent from you.
The last way your tax preparer can disclose your tax return information to a third party without your written consent is if it is going to be used to report a crime or to assist in the investigation of a crime. This even includes mistakes, where it is believed a crime has taken place but it turns out it did not.
Your Rights Under The Federal Tax Practitioner Client Privilege
You have rights in certain situations that are protected under law when you communicate with federal tax practitioners that are able to practice before the IRS. These include certified public accountants and enrolled agents but do not include registered tax return preparers. This simply means that any communication that you have between a certified public accountant or enrolled agent is protected just like it would be if you had communicated information to an attorney.
This privilege only is effective in regard to non-criminal tax proceedings that take place either in front of the IRS or in tax court. If you are being investigated for criminal activity then this privilege would not hold up. It is also important to remember that if you have not filed your tax return this privilege will probably not be allowed.
If you are a non-filing taxpayer, it may be best for you to seek out the help of an attorney instead of a certified public accountant or an enrolled agent. Your privileges under a tax attorney will be greater when dealing with the IRS in regard to not filing your tax return.
Your Rights Under The Attorney Client Privilege
Under the attorney client privilege you are given certain rights that cannot be taken away in connection with information that you share. This information however must be taken seriously for the attorney client privilege to stay in tacked. The information that you disclose to your attorney must be confidential in nature, it must be disclosed to your attorney when he is acting in a professional capacity and it must not be disclosed to any other individual. If you disclose this information to other parties, you waive the attorney client privilege.
Some examples of situations where you could waive the attorney client privilege include:
1. When you employ an attorney to preparer your tax return but do not seek out legal advice.
2. If you disclose the information with a third party other than your attorney.
3. If you discuss the confidential information in a public setting or social gathering.
4. If you disclose information to an attorney when you are not seeking legal advice from that attorney. If you were simply asking for advice in regards to a different topic then you would not be covered under the attorney client privilege when you disclosed your confidential information.
It is important to remember how your information is going to be treated under the law. In certain situations you will be safe from having your information disclosed to third party requests but in others you may not.