Do you know why the attorney-client privilege is so important in FBAR and IRS tax matters? The “Attorney-Client Privilege” is a critical protection when dealing with the IRS for any issue such as an audit or coming into compliance with FBARs. Only a tax attorney can extend this valuable protection to a taxpayer. The attorney-client privilege protects all information that is shared between our attorneys and the taxpayer, and this shield has strong implications for anyone who is dealing with the IRS.
Any taxpayer is wise to seek the counsel of professionals when dealing with the IRS. The question is “which professional” can best advise you while protecting your interests? Questions related to an IRS audit or exposure to penalties and potential criminal tax implications associated with foreign account and asset reporting (FBAR) lead to comprehensive conversations between the taxpayer and the professional who is working with them. You, as a taxpayer, must disclose a substantial volume of information in order for your advisor to prepare responses to the IRS and to negotiate a fair resolution.
One of the reasons the attorney-client privilege is so important in FBAR and IRS tax matters is protected confidentiality. If you are working with a CPA or other tax advisor, the IRS can and will subpoena all of their records, notes and data associated with these conversations and use them against you. There is no confidentiality between a taxpayer and a CPA, tax preparer or tax advisor that the IRS must respect. This requires the taxpayer to carefully consider what information to disclose to their accountant or tax preparer. Well-meaning taxpayers have often provided information directly to the IRS themselves in an attempt to show that they are good people who have nothing to hide. Unfortunately, the IRS then uses all of this against the taxpayer to assess the highest possible amount of back taxes, penalties and interest.
Janathan Allen is an experienced San Diego tax attorney with extensive accounting expertise. As an attorney, all of your important conversations and the information you disclose to her in that context is protected from the IRS by the attorney-client privilege. You can fully disclose all information so that we can work with you to determine the best way forward while protecting you from the IRS. We also handle all communications with the IRS and California tax authorities on your behalf. This protects you from disclosing a piece of information that might be used against you, and prevents the IRS or California tax agency from seeking additional information you’ve provided to us in confidence.
If you are facing the IRS in an audit or FBAR issue, it is important that you fully understand the nature of your exposure and the options available to you. We hope you know a little more about why the attorney-client privilege is so important in FBAR and IRS tax matters. The Attorney-client privilege is a valuable protection and one should never face the IRS without it. We invite you to contact Allen Barron or call today to schedule a free and substantive consultation and learn more about attorney-client privilege, as well as facts surrounding your audit or FBAR tax concerns.