Summons

[SunTaxMan]

Today I received in the mail a Summons (Subpoena for Records) from a law firm. Summons requires "My Complete File." This is related to a lawsuit brought as a result of an auto accident. The person involved in the accident is a client of mine. The specific person involved in the auto accident, and named in the lawsuit, is a 50% shareholder in an S Corp, which S Corp is also a client of mine - and it is the "complete file" of this S Corp, which is being subpoened.

My questions:

1. Do I need a Disclosure Consent from client (the S Corp) in order to comply with the summons? Or does the summons override he Disclosure Consent authority?

2. A "complete file" involves not just profit and loss information and tax returns, but also payroll, which would include names, addresses and social security informaiton for all employees. Do I need a Disclosure Consent from each employee?

3. Should my response regarding the needed Disclosure Consent form(s) be directed to the law firm requesting this "complete file" or to the S Corp?

4. Do I even need to contact my client (either the S Corp or the Shareholder) before submitting required records?

[Mike D]

Did your client retain counsel? If so ask them and be certain to obtain written instructions for your protection.

Mike Dubin CPA

[Pacun]

Who owns the other 50% of the S corp? If your client owns more than 50% of the S corporation after you consider his relatives, you might not have a choice and you will have to provide the documentation. Checking with his attorney is the best way to go.

[jlewis]

Attached is article from NC State Board of CPA Examiners from April, 2011, that gives general info even though different states may operate differently.

Subpoena Client Info.pdf

[Lion EA]

Also, contact your E&O insurance provider for advice.

[jainen]

>>Checking with his attorney is the best way to go.<<

It is up to his attorney to challenge the subpoena on behalf of the individual and/or corporation. But lawsuits sometimes go sideways when people blame the messenger. If you have E&O insurance, ask for instructions. If you don't have insurance-, ask an agent for advice anyway.

[jainen]

>>article from NC State Board of CPA Examiners<<

Thanks, jlewis, for a short article packed with important advice. One point it brings up is that a CPA is entitled to reasonable costs of copying and witness fees. In my area certified copies run 40 cents a page (maybe 25 if there are very many and they are not difficult).

It also warns against a general fishing expedition, which is likely when the subpoena calls for a "complete file." I would guess that records of the corporation have proprietary information that is of no relevance to the circumstances of the auto accident.

Still another point is that there is no standard subpoena. Original post says the client was "involved" in the wreck. Does that mean he is a defendent in the lawsuit? Is there also a criminal case? Was the subpoena issued by the judge?