When a Client Says 'I Have Something to Tell You. . . .' Should You Listen?

By Megan L. Brackney
Practical Tax Strategies
February 2014 Edition

A client calls his long-time, trusted accountant, and nervously says: “There is something I need to talk to you about. Can Icomein to see you? I don’t want to talk about it over the telephone.” Should the accountant make this appointment and hear what he has to say? If she does decide to listen to the confession, and the client tells her that for many years, he has had a large bank account in Switzerland that he has kept a secret from her, is this information confidential? Is it privileged? Does the answer depend on whether the client is being audited, under criminal investigation, or just wanting guidance on how to become compliant? The answers to these questions are not simple or self-evident. The AICPA Code of Professional Conduct, the anti-disclosure rules of Sections 6713 and 7216, Circular 230, and the accountant client privileges under Kovel 1 and Section 7525 create a tangle of seemingly contradictory rules regarding client confidentiality and privilege.

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