Unreported Income - Attorney Client Privilege
Attorney Client Privilege - US v KovelIf retained by an attorney, client accountants may receive the benefits of Attorney-Client privilege. In United States v. Kovel, 296 F.2d 918 (2d Cir. 1961), the Attorney-Client privilege was extended to accountants retained to assist the attorney in understanding taxpayer’s financial records.
The IRS Restructuring & Reform Act of 1998 […]
Unreported Income: Fraudulent Failure to File Tax Returns
In order to avoid the 75% penalty for fraudulent failure to file tax returns the tax payer must establish:
1) The delinquent filing is due to reasonable cause.2) The delinquent filing is not due to willful neglect.If both elements are established the failure to file penalty does not apply.
Penalty: Failure to file tax return
To establish that […]
Unreported Income: Criminal Penalties: Tax Preparers
Clients, with unreported income, may subject tax preparers to criminal penalties, fines, costs of prosecution and up to 10 years imprisonment (2 felonies, 2 misdemeanors):
1. Any person who willfully attempts in any manner to evade or defeat any tax or payment of any tax imposed by the Code is guilty of a felony.
A person convicted […]
Unreported Income (IRS): CPA Liability
The IRS has a new method for identifying returns with a high probability for unreported income (i.e., Unreported Income Discriminate Index Function (UI DIF)). Unreported income is both civil tax fraud and criminal tax evasion.
Taxpayers who have unreported income may be subject to up to 6 years in prison, 100% penalties and fines, and expose […]
