Courts Reject Kovel – No Attorney-Client Privilege for the Accountant
Offshore Disclosure is a Tax & Legal Submission
When a person decides to submit an offshore tax disclosure (aka Offshore Disclosure, Voluntary Disclosure or Tax Amnesty) to the IRS, it is a tax submission facilitated through legal representation — in order to protect your rights under the Attorney-Client Privilege.
Case: Cavallaro vs. United States
Cavallaro shows the limitation of Kovel.
In Cavallaro, the attorneys tried to expand the Kovel protection beyond its very limited application by claiming the Accountant was necessary.
The Court’s Holding in Cavallaro Rejects Kovel since the CPA was not Necessary
Kovel requires that to sustain a privilege an accountant must be “necessary, or at least highly useful, for the effective consultation between the client and the lawyer which the privilege is designed to permit.” 296 F.2d at 922.
As provided in Cavallaro:
“[B]ecause Ernst & Young was providing accounting services and so the Kovel extension of the privilege is inapplicable…
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