Subpoena

[cathyan]

If a Tax preparer (EA) is subpoenaed by a civil court, in a domestic matter, for a client's tax records, what can be disclosed, and what kind of client permission is needed, if any? It hasn't happened yet, but the matter was brought up. This would be a matter where former client (spouse) wants current client's (husband's) tax papers from previous years when they filed separate. My research has only found info on Tax Court requesting papers, not a civil court. I would guess that it would have to be an actual court subpoena, not an attorney's. And them, are work papers included, or just returns? Any help will be appreciated.

[mcb39]

I was served with a subpoena in October for a divorce case. However they were both clients of mine (long-term) and had always filed MFJ. I really never questioned what the ethics issues were here. It was a court subpoena and I would have had to go had they not settled at the eleventh hour. The court did order that I prepare their Return for 2012 since they were still married at the end of the year and have a lot of joint equity in rentals, business property, etc. and this is a community property state. After this year I will continue to retain him as a client and she will have to go elsewhere. They never asked me to bring any work papers, but, of course, they had all of the returns. It was more of a "he said", "she said" kind of thing. In the end I didn't have to go and have no clue how to advise you.

[jainen]

>>what can be disclosed, and what kind of client permission is needed<<

Everything, and nothing. Unless the client challenges the subpoena in court, it's impossible for the tax preparer to refuse. Even an attorney can not claim client privilege, because tax returns are intended for a third party (the IRS). An attorney can protect tax planning, but nothing that went into the tax return itself. CPAs and EAs can also protect planning, but only within IRS. The best you can do is charge a reasonable copy fee, like 25 cents a page (and keep their dirty mitts off the originals). So notify your client that you intend to comply by the due date, and tell him to call his lawyer immediately.

Then call your own lawyer or E&O insurance. Divorce---aargh!

[kcjenkins]

i agree. The only thing I would add is that you read the subpoena carefully, and only give exactly what is listed in the subpoena. And remember, right now, before you have gotten anything, would be a good time to give him back anything you have of his.