Lawyers and Accountants as Whistleblowers

International Tax Whistleblower Representation

Lawyers and accountants are in a unique position to become aware of tax underpayments. However, before submitting a tax whistleblower claim, both lawyers and accountants should carefully analyze their professional duties to ensure they are not violating codes of ethics which govern their disclosure of privileged information.

Whistleblower Hurdles Facing Lawyers and Accountants

Lawyers and accountants who want to be whistleblowers face special hurdles when submitting tax fraud information to the IRS. The Whistleblower Office presents all claims submitted to an IRS taint team to review the information for possible violations of attorney- or accountant-client privilege rules. The IRS often strictly applies interpretation of these rules in deciding what information it can use in its investigation.

Kenney & Mccafferty has extensive experience handling tax whistleblower claims and in addressing the IRS' concerns during the taint review process. Our lawyers regularly address the following issues in addressing IRS taint team concerns:

  • Circular 230
  • Attorney-client privilege
  • The criminal fraud exception to attorney-client privilege
  • Work product protections
  • Current tax preparer guidelines
  • Former tax preparer guidelines
  • State disciplinary rules
  • The One Bite Rule
  • The No Bite Rule
  • I.R.C. § 7216, 7525, 6713, etc.

Accountant Confidentiality Requirements

Certified Public Accountants must maintain the confidential information of their clients. There are exceptions to these requirements, however, and I.R.C. section 7623 may, in certain circumstances, allow accountants to divulge this information.

Many states have adopted the "Code of Professional Conduct" set forth by the American Institute of Certified Public Accountants (AICPA). A tax whistleblower attorney representing an accountant should be familiar with this code of conduct as it applies to accountants in that whistleblower’s state in order to assess in order to address any AICPA ethical issues relating to turning client documents to the IRS.

Several sections of the Internal Revenue Code specifically address a tax practitioner's ability to disclose client information. I.R.C. section 7525 states that all communications related to tax advice between an accountant and client are protected when these communications would have been protected between an attorney and taxpayer. Counsel should perform a legal analysis to determine whether this privilege applies.

I.R.C. section 7216 makes it a misdemeanor for an accountant to "knowingly or recklessly" disclose information furnished in connection with the preparation of tax returns, or to use this information for any other purpose. Again there are exceptions to this provision, and a tax whistleblower attorney should be able to advise you as to whether your disclosure will be in violation of this law.

Experienced Tax Whistleblower Representation

Attorneys and accountants face heightened scrutiny of their information by the IRS. Claims are regularly rejected because the IRS believes that they are based upon privileged information. Kenney & McCafferty can help ensure that the IRS will not improperly reject a claim by an overly restrictive application of the privilege rules.

Lawyers and accountants, face unique whistleblower risks because of their fiduciary and ethical duties to their clients. Without experienced legal representation, they may jeopardize their license to practice. Our firm has the experience needed to help maximize the likelihood of success of your claim and to help protect your professional license.

If you have knowledge of tax underpayment totaling $2 million or more, please contact our tax whistleblower attorneys today. Kenney & McCafferty will consult with you about your case, without obligation. All communications with Kenney & McCafferty attorneys regarding your case are confidential and protected by attorney-client privilege.