Section 7525 Privilege

7525 b 1 c.

Section 7525 privilege. 7525 provides a limited privilege to communications between a federally authorized tax practitioner and a taxpayer to the extent the communication would be considered privileged if it were between an attorney and a taxpayer. This portfolio discusses section 7525 of the code a statutory privilege applicable to communications between federally authorized tax practitioners and taxpayers this portfolio is designed to be used in conjunction with accounting policy practice portfolio the new revenue standard analysis application ii. Irc 7525 a provides a limited privilege for tax advice found in a communication with a tax professional of the class authorized to practice before the irs under circular 230.

105 206 and became effective for communications made on or after july 22 1998. Confidentiality privileges relating to taxpayer communications. Such practitioners are cpas enrolled agents and attorneys and are referred to as federally authorized tax practitioners fatp.

The attorney client privilege is naturally of major importance to lawyers but with the advent of the federal tax practitioner privilege under internal revenue code section 7525 it has also become of major importance to accountants and enrolled agents because the irc 7525 privilege is to the extent it applies coextensive with the attorney client privilege and has the same limitations. 7525 provides a limited privilege to communications between a federally authorized tax practitioner and a taxpayer to the extent the communication would be considered privileged if it were between an attorney and a taxpayer. Any other person holding a capital or profits interest in the person and.

The confidentialilty privilege for federal tax practitioners congress adopted irc section 7525 which specifically extends the common law attorney client privilege for communications to federal tax practitioners. The common law attorney client privilege applied only to attorneys and did not extend to other kinds of tax practitioners. 7525 b 2.

With respect to tax advice the same common law protections of confidentiality which apply to a communication between a taxpayer and an attorney shall also apply to a communication between a taxpayer and any federally authorized tax practitioner to the extent the communication would be considered a privileged communication if it were between a taxpayer and an attorney.