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Abstract
The tax practitioner privilege in Section 7525 extends to CPAs and other federally authorized tax practitioners the same common law protections of confidentiality available to attorneys under the attorney/client privilege. A clear element in the IRS attack on tax shelter promoters was that they were asserting an overly broad interpretation of the tax practitioner and attorney/client privilege. Recent D.C. Circuit and 7th Circuit decisions involving KPMG, BDO Seidman, and Andersen cast severe doubt on the viability of the tax practitioner privilege and the extent of the attorney/client privilege in the tax area. The courts seem to be coming to the view that the attorney/client privilege applies only to legal advice and, since tax advice is given by nonlawyers as well as lawyers, tax advice is not legal advice. Courts should be very cautious about watering down the attorney/client privilege in order to assist the IRS in its justified efforts to crack down on tax shelters.