Ethics III

[Bees Knees]

Doesn't this present some logistical problems? For one, if I can't tell anybody what the guy's name is (or anything else), how's the G-man gonna know who to look up? What will G-man say when client asks "Who are you and who sent you?" Do we have any legal standing to "turn somebody in?" Couldn't you just as easily be sued for harrassment and/or public humiliation and embarrassment (or whatever they'd call all that)? RSVP.

If you call the FBI and tell them the scam without identifying your client or any specific information on his return, the FBI can tell you whether there is anything they can do. Maybe they can’t because maybe no crime was committed, or it is beyond their jurisdiction. Then you have done all you can.

On the other hand, they might say, “Oh yeah, we know what is going on. Give us the details, and we can take it from here.”

At that point, you would have to say that the Internal Revenue Code prevents you from disclosing client confidential information, such as the client’s name, absent an order from the court. They might then say, “That’s no problem. We can get a court order to have you turn over that information.”

Issue solved.

[Bees Knees]

I found the out for those who would take the position that a crime was being committed. This regulation gives you the authority to report it even without the consent of your client. But only to the authorities, not the taxpayer’s family.


Reg. Sec. 301.7216-2(n) DISCLOSURE TO REPORT THE COMMISSION OF A CRIME. The provisions of
section 7216(a) and Section 301.7216-1 do not apply to the disclosure of
any tax return information to the proper Federal, State or local official
in order, and to the extent necessary, to inform the official of
activities which may constitute, or may have constituted, a violation of
any criminal law. In addition, such a disclosure made in the bona fide but
mistaken belief that the activities constituted a violation of criminal
law is not subject to section 7216(a) and Section 301.7216-1.