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Kovel letters for non tax business matters

Key tips and advice the working tax pro can use.
#1
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Just spent 9 hours going thru 15 years of emails and electronic documents because I was deposed by the attorneys for a company that acquired my client years ago. Don't ask why the statute of limits hasn't run but it hasn't.

I'm being very careful not to delete anything. The understanding between attorneys on both sides about which subjects were covered by possible attorney-client privilege and which weren't, and which are confidential tax documents make me a teensy bit sympathetic to Michael Cohen aka The Fixer.

Apparently, the post-acquisition tax adjustment/reimbursement section was poorly drafted by both sides not familiar with S corporations.

I always went by the rule that if there was the slight less whiff of any kind of fraud or big dollar negligence to immediately stop communicating with the client until I got a Kovel letter.

But in hindsight, in this case where there no government agency involved, but I'm getting dragged in to answer questions about what the parties' intent was actually 20 years ago, that I should have gotten Kovel letters every step of the way because who knows what's going to pop up later.

Are any of you getting Kovel letters in non tax controversy matters even when every one is ethical and above board?
 

#2
LW25  
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Texas
lenraphael wrote:[ . . . ] I always went by the rule that if there was the slight less whiff of any kind of fraud or big dollar negligence to immediately stop communicating with the client until I got a Kovel letter.

But in hindsight, in this case where there no government agency involved, but I'm getting dragged in to answer questions about what the parties' intent was actually 20 years ago, that I should have gotten Kovel letters every step of the way because who knows what's going to pop up later.

Are any of you getting Kovel letters in non tax controversy matters even when every one is ethical and above board?


In my case, the answer is no.

As an aside: To the extent that the tax matters involve communications regarding preparation of a return (that is, communications about what should or should not be shown on the return where the communications occurred before the return was completed), many commentators argue that the communication is not protected by the attorney-client privilege, even where the communication is made by the client directly to the attorney. To the extent (if any) that this is a correct statement of the law, having an attorney retain the accountant under a Kovel agreement does not seem to protect the various communications (between and among the attorney, the accountant, and the client) from forced disclosure.

I'm curious: Has this kind of thing been discussed in the case you're dealing with?
 


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