Priviledged Communications, Confidentiality & Privacy Acts

Question 1

List the exceptions to a practitioner’s privilege as outlined in the Internal Revenue Code §7525.

Answer 1

• Criminal matters;
• U.S. matters not before IRS or federal courts;
• State or local tax matters;
• Written tax shelter advice.

Question 2

What does the Bank Secrecy Act require of taxpayers?

Answer 2

This Act requires taxpayers to report foreign bank accounts.

Question 3

List some examples of when evidentiary privilege is not recognized.

Answer 3

• State common law;
• Federal common law;
• Most states’ statutes.

Question 4

To what items do accountant-client privilege apply?

Answer 4

An accountant is prohibited from sharing work papers with anyone without the client’s permission (except in certain situations) and may not disclose information obtained during work performed in testimonials unless subpoenaed and relevant to a court case.

Question 5

What does the acronym GAPP stand for?

Answer 5

Generally Accepted Privacy Principles.

Question 6

List the two actions that are punishable conditions under §7216 of the Internal Revenue Code.

Answer 6

• Disclosing any information obtained in preparation of a tax return.
• Using information for any purpose other than to prepare a return.

Question 7

List the six conditions under which disclosure of client information is acceptable.

Answer 7

• Client consents;
• GAAP calls for disclosure;
• Enforceable summons;
• Ethical examination;
• Peer review;
• To others in firm on “need to know” basis