Another tip I've been meaning to post here

[BillR]

If you have a lawyer - and you have a CPA - your lawyer can draft an agreement of confidentiality between them quite cheaply.

This has two really nice benefits.

First, your lawyer and CPA can exchange financial information without you having to be involved - which is nice for transactions that are standard and boring (ie, yearly updates to the corporate minutes on the financial status of the company).

The second benefit is that your CPA's actions are now covered by attorney/client priviledge. We all of course hope we never NEED an attorney - but every advantage you can have in life is worth it.

So if the IRS randomly decides you fit the profile of a "cheat" and they subpoena your tax information from your CPA they are going to have a much more difficult time. Consequently - and assuming they are just on a fishing expedition - you will have more leverage.

Although if you are cheating on your taxes I have no sympathy for ya

[lbb_mike]

Great tip! I actually go to an accountant that shares his offices with a business lawyer. It's great to have both under one roof. They were albe to advise me and set up my corp very quickly.

[SeattleCPA]

I don't think this works, sorry. (And I'm a CPA.)

In order for a CPA's work to be covered by attorney client priviledge, you need to make the CPA into what's called a "Kovel accountant." That means that the CPA is basically working for the attorney (in the same way that the attorney's secretary or paralegal does)... and that puts the accountant under the attorney's priviledge umbrella.

I think it's pretty well established that you also can't become a Kovel accountant at the last minute...

<Signature to be set up via User CP>

[BillR]

Originally Posted by SeattleCPA

I think it's pretty well established that you also can't become a Kovel accountant at the last minute...

Whether or not it works is open to debate - but the entire point of my post was that (assuming it works) you should do it early on.

[SeattleCPA]

Originally Posted by BillR

Whether or not it works is open to debate - but the entire point of my post was that (assuming it works) you should do it early on.

OK., let me be more direct. I'm a CPA with 25 years of experience, an MBA in finance, an a MS in taxation, also a past adjunct tax professor at one of the country's largest graduate tax schools. And despite what you may have been told, the only way to get your accountant covered by the attorney client priviledge is by making the accountant into what tax practitioners all know as a "Kovel accountant."

The IRS, equivalent state agencies, and even the estranged spouse's divorce attorney can all subpoena a CPA's records. This is clearly, clearly established. It is not debatable.

[BillR]

Originally Posted by SeattleCPA

It is not debatable.

This is the internet - everything is debateable

That said, I stand corrected. Also, I need to have a chat with my lawyer and CPA.

[nytemare]

I just looked at SeattleCPA; I think he knows what he's talking about...just my two cents. Nice information from both though!

[Evan]

I would have to agree with Steve. Accounting is generally not one of those protected fields unless your CPA worked under an attorney, and I still see problems. If the CPA was subpoenaed and failed to comply, a warrant could be issued for their arrest. I'm not sure how many CPAs are really wanting to try to set court precedent over the issue of privileged information while behind bars.

And if a CPA is getting subpoenaed for financial records of a clients business, that CPA may really want to reconsider that relationship with the client, or perhaps do a bit more homework.

[BillR]

Okay, so just hire a tax attorney in the first place to be your CPA and legal counsel

I SURRENDER ALREADY!