PRIVILEDGED

Legal Protection That CPAs and Enrolled Agents Can’t Provide

When you work with a tax attorney, your communications are protected by attorney-client privilege—a legal safeguard that doesn’t apply to CPAs, enrolled agents, or other tax professionals. This protection can be crucial if your tax matter involves potential criminal exposure, litigation, or sensitive financial information.

What Is Attorney-Client Privilege?

Attorney-client privilege is a legal doctrine that protects confidential communications between you and your attorney from being disclosed to third parties, including:

The IRS or state tax authorities
Courts
Other government agencies
Opposing parties in litigation

This means that what you tell your attorney in confidence cannot be used against you, even if subpoenaed or requested through legal process.

Why It Matters for Tax Cases

Tax matters sometimes involve sensitive issues:

Potential criminal tax evasion or fraud
Unreported income from questionable sources
Aggressive tax positions that might be challenged
Offshore accounts or foreign income
Business activities in gray areas of the law

When discussing these matters with a CPA or enrolled agent, your communications are not privileged. The IRS can subpoena your CPA’s notes, emails, and records of your conversations. With an attorney, these communications are protected.

The Kovel Agreement Exception

In some cases, we work with CPAs and accountants under a “Kovel agreement,” which extends attorney-client privilege to their work when they’re assisting us in providing legal advice. This allows you to benefit from accounting expertise while maintaining legal protection.

When Privilege Matters Most

Attorney-client privilege is especially important in:

Criminal Tax Investigations: If the IRS Criminal Investigation Division is involved, everything you say to a non-attorney can be used as evidence against you.

Tax Court Litigation: Communications with your attorney about litigation strategy are privileged; communications with your CPA are not.

Aggressive Tax Positions: If you’re taking a position the IRS might challenge, discussing it with an attorney protects your strategy from disclosure.

Sensitive Financial Matters: Discussions about asset protection, offshore accounts, or complex transactions are safer with an attorney.

Limitations of Privilege

Attorney-client privilege is not absolute. It doesn’t protect:

Communications made to further a crime or fraud
Information you share with third parties
Facts (as opposed to legal advice)
Tax return preparation (which is not considered legal advice)

CPAs and Enrolled Agents Have Limited Privilege

Tax practitioners have a limited “federally authorized tax practitioner privilege” under IRC Section 7525, but it:

Only applies to federal tax matters (not state)
Only covers tax advice (not return preparation)
Doesn’t apply in criminal cases
Doesn’t apply in many IRS proceedings
Can be waived more easily than attorney-client privilege

The Attorney Advantage

When you hire a tax attorney, you get:

Full attorney-client privilege for all communications
Protection in both civil and criminal matters
Coverage for federal and state tax issues
Stronger confidentiality protections
Peace of mind that sensitive discussions stay private

Our Commitment to Confidentiality

Beyond legal privilege, we take your privacy seriously. All client information is:

Stored securely with encryption
Accessible only to your assigned team
Never shared without your consent
Protected by professional ethics rules
Handled with discretion and respect

If your tax matter involves sensitive issues or potential legal exposure, attorney representation isn’t just helpful—it’s essential.

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