Ethics III

[Armando Beaujolais]

Professional ethics are not the same thing as personal ethics. That's why the two different things are listed as different things in the dictionary.

Personal ethics involve things like honesty, decency, fairness, kindness, treating others like you'd like to be treated, etc.

Ethics for tax professionals involves things like knowing who is in authority, knowing what you have to disclose to authority and what not, knowing what professional actions you can take in which situation.

Saying that personal and professional ethics are the same thing is like saying your rules of professional conduct would be the same if you were a tax professional or a professional wrestler. Sorry, not the same rules of professional conduct.

Let's take Jesse Ventura as an example. He was a professional wrestler and later became governor of Minnesota. His personal ethics didn't change. But you can bet the rules of professional responsibility were worlds apart between his wrestling days and his governor days.

That doesn't mean there's absolutely no overlap. But the two are separate enough that it's silly to try to discuss both as if they're the same thing.

[DTS]

So...

what is the correct answer that was given to EA gathering the other night?

Dennis

[jainen]

after you found out

>>Professional ethics... personal ethics.... it's silly to try to discuss both as if they're the same thing<<

I'm not saying they are the same thing. I'm saying they can never be in conflict.

If you subscribe to or advertise professional ethics that you do not personally accept, then your claim to have personal ethics is not really valid, is it? Because if you truly had such ethics, then you would do like Joe's daughter and refuse to work in that job, at least after you found out.

[Bees Knees]

The poll is officially closed

The answer is, you cannot breach confidentiality. You can try to get the client's permission to speak with his son about his financial affairs. But there is no provision in Circular 230 that allows you to break the confidentiality rules without the client’s permission.

Some have suggested that it is OK to breach confidentiality if a crime was being committed. That may give you reason to report it to the proper authorities, but the way the scenario was worded, you do not know a crime was committed. You believe he is being scammed, but the scenario said the scams were originating in foreign countries, and nothing was said about it using the U.S. Postal Service. I guess I would probably call the FBI and provide details without naming my client, to see if any crime was being committed and what you can do.

Other than that, as some have suggested, even if it goes against what you believe is your moral responsibility, there is no provision that allows you to contact relatives of your client. You can’t even tell the son that you are doing his father’s taxes, without your client’s permission.

I think this is an example of how our professional ethics can contradict our personal ethics. To me, it would be a sin to sit by and see an old man deteriorate while going senile, see him being taken advantage of by scam artists, and not try to do something to help him. Sorry if that opinion offends anyone’s personal ethics. Maybe there could be some way out of the confidentiality rule if we refused payment for our services.

[Bees Knees]

NAEA rules state, "Members and associates will maintain a confidential relationship between themselves and their clients, or former clients, disclosing confidential information only when authorized or legally obligated to do so."

I guess the refusing payment would not work, if you had been collecting fees for the past 30 years. The only other issue is if there is some legality that permits you to report elder abuse in your locality. Maybe the Texas rule cited earlier might work in that area. I don't know. There is nothing, however, in Circular 230 that would allow it.

[Black Bart]

Quit?

[QUOTE=jainen

If you subscribe to or advertise professional ethics that you do not personally accept, then your claim to have personal ethics is not really valid, is it? Because if you truly had such ethics, then you would do like Joe's daughter and refuse to work in that job, at least after you found out.[/QUOTE]

Well, I'm gonna tell whoever I think I need to tell -- actually it probably would have to be a family member because if you call those people you were talking about (doctor, lawyer, Indian chief), a good many of them wouldn't know, care, or be at all interested in poking into somebody's private business on your say-so or without being authorized by someone in the family.

Too, what would they do? Call the individual and say "Listen, taxman so-and-so thinks you're losing your marbles and are squandering your money"? I imagine you'd get a hot phone call yourself then.

So, with all due respect to those who have law degrees and can afford to quit, I would prefer not to starve, so I'm staying in this business.

Maybe I'll just cancel my NAEA membership as a token gesture.

[Bees Knees]

Don't blame NAEA...

It's in the Internal Revenue Code

SECTION 6713. DISCLOSURE OR USE OF INFORMATION BY PREPARERS OF RETURNS


(a) IMPOSITION OF PENALTY

If any person who is engaged in the business of preparing, or providing
services in connection with the preparation of, returns of tax imposed by
chapter 1, or any person who for compensation prepares any such return for any
other person, and who--

(1) discloses any information furnished to him for, or in connection with,
the preparation of any such return, or

(2) uses any such information for any purpose other than to prepare, or
assist in preparing, any such return,


shall pay a penalty of $250 for each such disclosure or use, but the total
amount imposed under this subsection on such a person for any calendar year
shall not exceed $10,000.


(b) EXCEPTIONS

The rules of section 7216(b) shall apply for purposes of this section.


Section 7216(b) says:

(b) EXCEPTIONS

(1) DISCLOSURE

Subsection (a) shall not apply to a disclosure of information if such
disclosure is made--

(A) pursuant to any other provision of this title, or

(B) pursuant to an order of a court.


(2) USE

Subsection (a) shall not apply to the use of information in the
preparation of, or in connection with the preparation of, State and local
tax returns and declarations of estimated tax of the person to whom the
information relates.


(3) REGULATIONS

Subsection (a) shall not apply to a disclosure or use of information which
is permitted by regulations prescribed by the Secretary under this
section. Such regulations shall permit (subject to such conditions as such
regulations shall provide) the disclosure or use of information for
quality or peer reviews.

[Bees Knees]

REG. SECTION 301.7216-1(b)(3) says:

(3) TAX RETURN INFORMATION. The term "tax return information" means
any information, including but not limited to a taxpayer's name,
address, or identifying number, which is furnished in any form or
manner by a taxpayer for, or in connection with, the preparation of a
tax return of such taxpayer. Information furnished by a taxpayer
includes information which is furnished on behalf of the taxpayer by
any person; for example, any person required under section 6012 to
make a return for such taxpayer, such as a guardian for a minor, by a
duly authorized agent for his principal, by a fiduciary for an estate
or trust, or by a receiver, trustee in bankruptcy, or assignee for a
corporation.

Note that a client’s name is confidential. You can’t even tell someone who your client is.

[WhiteOleander]

I'm the one who spoke of the Texas law. I have never read the law. So, considering what you have posted as the correct answer, I would have to research the Texas law to see if I could intervene for the client by calling the authorities.

Thanks for the thought provoking questions.

[veritas]

I can talk to the son about my concern for the capacity of the parent. I would try to arrange a meeting with parent, son and myself.

[Armando Beaujolais]

I can talk to the son about my concern for the capacity of the parent. I would try to arrange a meeting with parent, son and myself.

So what are you going to tell the daughter who barges into your office with her lawyer the next day and you find out there's been a huge fight within the family about dad's finances?

I heard a wonderful solution to this problem. Find some kind of written document, brochure, anything you can print out, that talks about elderly people being hit by scams and how the family should be on the alert. Hand that to the son. You haven't breached confidentiality to the dad, and you've done all you can to alert the son to what he should be watching for.

[jainen]

... and tells you

>>the daughter who barges into your office with her lawyer<<

... and tells you that SHE has the durable power of attorney for all medical issues, what you thought was a Nigerian Lottery is actually the missionary program the family has supported for three generations, and there's a restraining order against her brother so you shouldn't have told him what city Dad lives in.

[Bees Knees]

I can talk to the son about my concern for the capacity of the parent. I would try to arrange a meeting with parent, son and myself.

That assumes the son knows you are doing the parent's return. You can't tell anyone who your clients are.

Now of course, in the scenario presented, 99.9% of the time, the family members already know through talking with each other that you are doing everyone's return. In fact, the father probably referred his son to you years ago. In that case, since family members already know you are doing each other's return, you would not be breaching any confidentiality rules by expressing concerns about a parent's health. Being careful not to mention anything about his tax return, you could give general advice to the son about how to get a power of attorney for Dad's finances in the event Dad starts to lose it. I think enough hints could be given through subtle suggestions to get the son to start opening up about how he thinks his Dad is starting to lose it. The family members are going to notice these things long before you, and they probably already suspect what you found out. Getting the son to reveal information you already suspect about the Dad is not breaching confidentiality, because the son is the one bringing up the specifics, and you are simply encouraging him to carry through on his suspicions.

[Unregistered]

I would not tell the son I did his tax return. I would tell the son that I am concerned about the mental capacity of his father. Since you guys are adding the daughter after the fact I will add that I met the son somewhere socially and told him that I had seen diminished capacity for the father at the grocery store

veritas.

[Black Bart]

jainen / Bees

..."tax return information" means any information, including...a taxpayer's name,
address, or identifying number...

...a client’s name is confidential. You can’t even tell someone who your client is.

Okay, suppose I decide to go with jainen's theory that:

(1) Most relatives are cutthroats with lawyers on retainer just waiting to pounce.

(2) Ordinary people don't have enough sense to know somebody's losing it -- even if they tell you (as a poster here once said his client did) that the Beatles are coming to town tomorrow.

(3) I take it on myself to get a typical, wonderfully efficient government worker to declare the solemnly official pronouncement: "This guy's nuttier than a fruitcake."

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.