Whenever you are dealing with the IRS the Attorney-Client Privilege is the best protection a US taxpayer can employ. The Attorney-Client Privilege protects all information shared in confidence between a taxpayer and their attorney. This extends to all paperwork, notes, personal papers, cell phone calls, emails and even texts. The IRS is unable to force you or your attorney to disclose information that is protected by the Attorney-Client Privilege. Why is this such an important issue?
Many taxpayers may wish to turn to a CPA or their tax preparer when they receive notification from the IRS regarding an audit. In order to prepare for and achieve the best possible outcome in the audit, you will need to provide substantial information to your CPA, bookkeeper or tax preparer. This is your greatest vulnerability. The IRS can and will subpoena all records, information, work notes, cell phone records, texts and emails between you and your CPA, bookkeeper or tax preparer. The IRS will then use this information against you, in order to expand the scope of the audit and increase the amount of the check you will write at the end of the audit.
The US Supreme Court has closed the door on Miranda Rights and your ability to claim the protections of the Fifth Amendment when dealing with the IRS. Even criminals must disclose accurate information to the IRS, regardless of the criminality of that data. You may attempt to invoke the Fifth Amendment, however, this will simply result in contempt of court charges (jail time), criminal prosecution, and a more vigorous examination of your financial dealings by the IRS. Any action you take that emboldens the IRS is simply a bad strategy.
If you have received notification of an audit by the IRS the Attorney-Client Privilege is the best protection you can rely upon to reduce your exposure to the IRS and preserve valuable information. The experienced domestic and offshore tax attorneys at Allen Barron manage all communications with the IRS. Many of our clients never have to speak with the IRS at all. We extend the protections of the Attorney-Client Privilege while providing the supporting services of a CPA and tax preparation when necessary – all in a single source. Your costs are reduced, your protection is maximized and the likelihood of an excellent outcome in your IRS audit has significantly increased.