Can Your Accountant Report You to the IRS?

Accountant Report Confidentiality Business Communication IRS

Accountants & Client Confidentiality

One of the questions many new business owners often ask when hiring a new accountant is whether there will be a level of confidentiality between them and their new employee. While your accountant is not permitted to speak about your personal finances with anyone outside of your business, it is possible that your accountant could report you to the IRS.

When Confidentiality Must Be Broken

There are several cases in which an accountant must ditch the client and customer confidentiality agreement. One of those times is if your accountant is summoned by the courts. If your accountant be summoned to testify about his or her knowledge of your finances, your accountant will be legally obligated to disclose all information pertaining to your case. Lying or refusing to share information could have them in contempt of court which suddenly could have them behind bars simply for trying to protect you.

Keep Open and Honest Communication

To avoid this sort of dilemma, it is encouraged that you simply keep open and honest communication with your accountant. If you are handling your money illegally, share that information with your accountant. Sharing that information can help your accountant determine if he or she wants to continue working for you. As noted in previous articles, your accountant cannot be held liable for your mistakes; however, they can be held liable for your cover up. Don’t put them in a situation or position to have to cover up for you.

Do you have any more burning questions about the IRS and your business dealings? Post your questions (and comments) below.

Image credit: TaxCredits.net

  • Huddleston Tax CPAs / Huddleston Tax CPAs – Burien
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    Huddleston Tax CPAs & accountants provide tax preparation, tax planning, business coaching,
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    We serve: Tukwila, SeaTac, Renton. We have a few meeting locations. Call to meet John C. Huddleston, J.D., LL.M., CPA, Lance Hulbert, CPA, Grace Lee-Choi, CPA, Jennifer Zhou, CPA, or Jessica Chisholm, CPA. Member WSCPA.