Tax practitioner privilege must be handled with care

Accounting Today, November, 2003 by George G. Jones

The so-called tax practitioner privilege came into the law in 1998 as part of the IRS Restructuring and Reform Act of 1998 (Code Sec. 7525). The goal was to put tax practitioners other than tax attorneys on a more equal playing field in terms of their ability to engage in privileged communications with clients who are seeking tax advice.

The Code Sec. 7525 privilege was designed to apply to tax practitioners and their clients the same types of privilege that would be available to attorneys and their clients under the attorney/client privilege, with several exceptions provided in the statute.

The combination of those statutory exceptions, the limitations on the attorney/client privilege, the Sarbanes-Oxley Act, and several recent judicial decisions in the tax...