Discussion:Subpoena for my clients' tax information
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Discussion Forum Index --> Tax Questions --> Subpoena for my clients' tax information
| 14 March 2008 | |
| I received a subpoena last week for all of my clients' tax records. I told the attorney who subpoenad me that according to IRC 7216 I needed a court order before I could disclose my clients' confidential tax information. The attorney said that a subpoena is the equivalent of a state court command (this is a civil case by the way), and that if I did not comply he would start legal action against me. So of course, I hired an attorney. Does anyone else have experience with this? | |
RoyDaleOne (talk|edits) said: | 14 March 2008 |
| I now recommend to all my clients that if tax or financial information is being released in a court action that they seek a court order for the information to sealed, and not made public record.
You did the right thing in hiring an attorney. Your, client can release you from the non-disclosure of IRC 7216, if they want. | |
TaxNovice 1 (talk|edits) said: | 14 March 2008 |
| Sfbcpa-What state are you in??? | |
| 14 March 2008 | |
| Major Bummer. AICPA standards allow compliance with a valid civil subpoena with the caveat that in general this request will not meet §7216 standards. Your attorney will take the position that said subpoena is not a court order. Then the fun starts, and unfortunately the legal costs. | |
| 14 March 2008 | |
| I am in WA State.
My attorney just researched this and said I would have to comply but that he would be in touch with my clients' attorney. | |
| 14 March 2008 | |
| Personally, I wouldn't have spent the money on an attorney. It is nothing new. A subpoena is not a court order and 7216 is well understood. | |
| 14 March 2008 | |
| sfb, I think your lawyer may want to look at Dennis' post. I would guess that your lawyer is going to tell client's lawyer that this stuff is going to come out anyway, especially if this is a divorce, and client might as well waive. I'm speculating about the divorce, of course. | |
| 14 March 2008 | |
| It is a civil suit where my clients are the plaintiffs. My clients never told me about this and I can't get a hold of them as their phone number has been disconnected and after numerous e-mails they still are not getting back to me! The defendants attorney in this suit sent me a letter stating that if I don't comply he will seek legal action against me, which means I would have to pay for an attorney and I believe the cost of this would outweigh the penalty the IRS could impose on me. I was reading that I could be fined $250 if I don't have just cause for disclosing this information. Is that correct? | |
PostingFromWork (talk|edits) said: | 14 March 2008 |
| Don't attorneys alway follow up a request with "or we'll seek legal action"?
§7216 is a solid defense. I would tell them to pound sand, but I'm no attorney, so it could be stupid advice. I wonder if SFBcpa could recover his attorney's fees if he got taken to court over this. | |
| 14 March 2008 | |
| I can't give legal advice here, BUT the item that Dennis posted above makes perfect sense to me. Don't let the defense lawyer cow you. It's his job to be an *ss.
Are you sure all the IRS can do to you is fine you $250.00? Might other provisions regarding preparers kick in along the lines of general fitness to practice before the IRS? I'll let some of the ethics and CPE teachers here tackle that. I would proceed with caution about honoring that subpeona. | |
| 14 March 2008 | |
| And I hope you are billing your client for the time you are spending here now researching this, because you should seek independent legal advice. | |
| 15 March 2008 | |
| Yeah, you are right. I am going to see what else I can do to get out of this. Thanks | |
| 15 March 2008 | |
| I just got a call from my attorney and as it turns out from my clients' attorney, my clients are fine with me disclosing this information. Now wouldn't that have saved me all of this time especially during tax season to call me to let me know that? Boy, are they getting billed for this! Thanks everyone! | |
| 15 March 2008 | |
| Save yourself some atty. research time by bringing that IRC section with you when you go to your lawyer, and let your lawyer know there are bigger issues here that involve your livelihood. | |
| 15 March 2008 | |
| I see, well I referred to that possibility above. Now, get that in writing from your client. | |
| 15 March 2008 | |
| I was peripherally involved in one of these. Attorney requesting information was client's wife's father. Attorney representing CPA was his sister, who promptly filed suit against plaintiff and attorney for emotional damage. Still in court. Fourth judge. | |
| 15 March 2008 | |
| I don’t understand how a subpoena is not a valid court order within the meaning of Sec. 7216 (unless the court grants a motion to quash). | |
TheTinCook (talk|edits) said: | 15 March 2008 |
| In most jurisdictions, attorney's in civil matters can subpeona people without the involvement of the court. At most, the court clerk just hands out a blank form.
If you look at §301.7216-2, the only exception for supoenas are those issued by a grand jury or a Federal or state agency. | |
| 15 March 2008 | |
| This happened to me many years ago. I hired an attorney also then to find out that this is covered under my professinal liability insurance. Got it switched from the attorney I hired ($2k later) to the insurance program. Call your insurance carrier. | |
