Accountants and the client privilege doctrine.

• Author: Camperell, Kevin J.

Even though many state statutes provide that public accountants are not required to divulge information acquired in their capacity as accountants, communications with accountants are not privileged under Federal tax law.

Numerous cases have affirmed the Service's position that accountants' work product is not privileged unless the accountant is employed by the taxpayer's attorney.

In Couch, 409 US 322 (1973), the Supreme Court ruled that the taxpayer could not prevent the enforcement of a summons for the production of income tax records held by her accountant. The Court ruled that she had given long-term possession of her records to the accountant and that there was no personal compulsion against her to produce the records.

The Court also stated that because she was aware that much of the information in the records had to be disclosed in her tax returns, she should not have any legitimate expectation of privacy that would bar production of the records under the Fourth or Fifth Amendment.

In Kershaw, DC Ore., 5/20/77, a taxpayer's motion to intervene in a summons proceedings in order to be present at the interrogation of the taxpayer's accountant was denied. The court ruled that the limit placed on the questioning by the attorney-client privilege adequately protected the taxpayer's interest.

Bernardo, 104 TC No. 33 (1995), expands and explains under what circumstances the accountant's documents may be protected from IRS discovery under the...