The resolution of any complex tax litigation necessarily involves working with accountants as well as with lawyers. In many instances, the confidentiality afforded to federally authorized practitioners may not be sufficient to shield communications between accountants and taxpayers from US Internal Revenue Service (IRS) scrutiny. The Kovel Rule extends the attorney-client privilege to communications between accountants and their clients, as well as communications between lawyers and accountants. In Adams, a federal district court applied the Kovel Rule to shield emails from being disclosed to the Government. The attached Legal Update, prepared by Mark Leeds and Bruce Wilson of the New York office of Mayer Brown, explores this new decision and its implications for cloaking accountant emails from IRS scrutiny under these rules.
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This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.