Tax Whistleblower Blog

Accountants as Whistleblowers vs. Ethics

As a principal of www.rewardtax.com, I am frequently asked by Whistleblower clients, who happen to be accountants, whether they are at risk for turning in a client for tax malfeasance.  I read a very interesting article this week authored by Cara Patterson that was published by The Trusted Professional, the newspaper of the New York State Society of CPAs (http://www.nysscpa.org/ezine/ETPArticles/print/CP8708.htm).  In the article, the author draws an honest conclusion that an accountant does not have the same handcuffs on reporting their clients’ tax malfeasance as, say, an attorney.  The author also points out that it is nearly inconceivable that an accountant could be reprimanded or sued for malpractice for reporting the tax malfeasance of a client.  The Office of the IRS Tax Whistleblower Reward Program has stated to me on numerous occassions that their biggest source of cases thus far is former tax directors or CFOs who separate from their former employer.  In addition, the IRS has made it clear through various notices that they will accept all information from whatever source, and they will let the Courts decide whether certain information gained from privileged sources should be excluded as tainted evidence.  I am very glad that the New York State Society of CPAs chose to publish this piece.  It is high time that the accountant societies begin to question and discuss the issue of accountants who blow the whistle on their clients who commit tax malfeasance.  Fear of reprimand may be keeping the majority of accountants from coming forward, yet, their silence is allowing unscrupulous taxpayers to continue to fill their pockets and further erode the tax base & taxpayer confidence.