WHAT PRIVILEGE?

The new tax laws extended confidentiality to some client-tax preparercommunications, but the privilege ismuch more limited than the rulesthat apply to conversations with yourlawyer. If you've deliberately falsifiedyour tax return, for example, you cantell your attorney and be coveredunder the attorney-client privilege;tell your tax preparer the same thingand they can be forced to disclose theinformation. In a recent case, a taxshelter promoter claimed it had privilegewhen the IRS wanted thenames of its clients for its investigationinto abusive trusts. A US federalcourt disagreed, and the firm wasforced to identify those taxpayerswho had set up tax shelters.