07/31/2011
Wall Street Journal 5

Why Your CPA Might Blab
This article addresses the issue of the CPA’s reliability. The Internal Revenue Service (IRS) more often is challenging the lawyer-client right to confidentiality, and there is a rule called Kovel Rule has been providing the principle for tax lawyers to follow for over 50 years. However, there are some opposite points of views claim that accountants who are working with a lawyer for a client are not necessarily covered. The reason why they are doubted the confidentiality of the communication is because the Kovel Rule is only applied by some states to protect certain accountant-client communications, but not applied by the federal government. Therefore, it is important for the lawyers to make sure that they have spelled out how the accountant will assist them and then separated all related documents in order to ensure their conversations are considered confidential. Moreover, it is the best way to do so everything is clear when the law firms hire an accountant that accounting working isn’t protected under Kovel. In conclusion, even though taxpayers are worried about confidentiality under the Kovel Rule, the lawyers and accountants are even more concerned about it. However, if everyone thinks through carefully what they are doing and if it is protected, there would not be that bad.

Reference
Dale, Arden. “Why Your CPA Might Blab.” The Wall Street Journal. June 18, 2011. July 30, 2011. Web Source.