Privileged Communications, Confidentiality, and Privacy Acts

Question 1

What does the Bank Secrecy Act require of taxpayers?

Answer 1

This Act requires taxpayers to report foreign bank accounts.

Question 2

What does the acronym “GAPP”

Answer 2

Generally accepted privacy principles.

Question 3

List the two actions that are punishable conditions under sec 7216 of the IRC.

Answer 3

• Disclosing any information obtained in preparation of a tax return
• Using information for any purpose other than to prepare a return.

Question 4

List the six conditions under which disclosure of client information is acceptable.

Answer 4

• The client consents
• GAAP calls for disclosure
• There is an enforceable summons
• There is an ethical examination
• There is a peer review
• To others in the firm on a need-to-know basis

Question 5

List the exceptions to a practitioner’s privilege as outlined in the IRC 7525.

Answer 5

• Criminal matters
• U.S. matters not before the IRS or federal courts
• State or local tax matters
• Written tax shelter advice

Question 6

List some examples of when evidentiary privilege is not recognized.

Answer 6

• State common law
• Federal common law
• Statutes of most states’ statutes

Question 7

To what items do accountant-client privilege apply?

Answer 7

An accountant is prohibited from sharing work papers with anyone without the client’s permission (except in certain situations) and may not disclose information obtained during work performed in testimonials unless subpoenaed and relevant to a court case.