The Kovel Accountant
The Greatness Of Mickey Mantle And Louis Kovel
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The Greatness Of Mickey Mantle And Louis Kovel
The 1961 Yankees occupy a special place in team history because, in my humble opinion, they were the only truly transcendent Yankee team between Joe DiMaggio and Derek Jeter. Mickey Mantle could have been a hero in a Sophocles play. He could have easily broken every offensive record in the book, but a tragic flaw, or rather flaws, kept him from his full potential. Yet, even at half speed, he ran laps around everybody else. Fellow outfielder Roger Maris really only had two or three good years, but what years they were. This Yankee team also featured Hall of Famers Yogi Berra (at one time, my next-door neighbor) and Whitey Ford. These guys were essentially complementary players on that squad, which should tell you something.
If a bleary-eyed Mickey Mantle would have opened a lawyer or accountant trade journal in December of 1961 and flipped towards the back, just before the classifieds and obituaries, he may have found a write-up about a rather obscure Second Circuit case: United States v. Kovel. Various courts and codes have whittled away at this decision over the years, but it still stands firm as a case that can extend the attorney-client privilege to an accountant or other financial professional. Very simply, any communication between an attorney and a taxpayer that is deemed privileged under the attorney-client privilege will also be deemed privileged if it is between a “federally authorized tax practitioner” and a taxpayer. If you think that’s not a big deal, you’ve probably never been audited.
In this presentation, I'll do a deep-dive into the Kovel case along with Kovel agreements and discuss the case that gave rise to them.
Topics include:
How does the Kovel accountant concept enhance the attorney-client privilege compared to traditional accountant-client relationships?
What are the potential risks associated with using an original accountant in the context of a Kovel agreement?
In what ways can the distinction between the roles of the original accountant and the Kovel accountant affect the outcome of a case involving IRS scrutiny?
Why might a client resist the recommendation to hire a new accountant, and how can attorneys effectively address these concerns?
Discuss the implications of the Kovel agreement on the confidentiality of communications between a taxpayer and their accountant.
How does the Kovel case illustrate the importance of understanding the limitations of the attorney-client privilege in tax matters?
What steps should an attorney take to ensure that a Kovel agreement is properly executed and protects the client's interests?
In what scenarios might the privilege provided by Section 7525 be challenged, and what can be done to mitigate these challenges?
How does the work-product doctrine relate to the Kovel accountant, and what protections does it offer?
Considering the narrow scope of the accountant-taxpayer privilege, how can taxpayers safeguard their communications with their accountants?
How does the Kovel accountant framework compare to other methods of integrating legal and financial advice in tax matters?
What lessons can be learned from the Kovel case regarding the balance between legal obligations and the need for confidentiality in financial practices?
