ExpertHard1 markMultiple Choice
CPA · Question 06 · Area I: Ethics & Tax Procedures
Which of the following communications between a CPA and a client would generally be protected by the tax practitioner privilege under IRC §7525?
Which of the following communications between a CPA and a client would generally be protected by the tax practitioner privilege under IRC §7525?
Answer options:
A.
Written advice regarding the promotion of a tax shelter.
B.
Communications regarding a criminal tax investigation.
C.
Tax advice regarding a non-criminal tax matter before the IRS.
D.
Communications regarding the preparation of the tax return itself.
How to approach this question
IRC §7525 extends the attorney-client privilege to tax practitioners but with major exceptions: Criminal matters and Tax Shelters.
Full Answer
C.Tax advice regarding a non-criminal tax matter before the IRS.✓ Correct
C
IRC §7525 extends the common law attorney-client privilege to tax advice furnished by a federally authorized tax practitioner. However, it does not apply to criminal tax matters or to written advice regarding the promotion of a tax shelter.
Common mistakes
Assuming the privilege applies to criminal investigations or return preparation work.
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