United States v. Sergio Gardea - 05/10/2018

Tax preparer found not guilty on all 30 counts of preparing false tax returns following a 2 week jury trial today. Mr Gardea was represented by Miami criminal tax lawyer David M. Garvin.

CPA's Ethical Obligations During Federal Investigations.

      Almost every CPA knows that he owes a duty to his client not to discuss the client’s affairs with a third party without the client’s prior express consent.  It is unethical for any CPA to knowingly violate this duty to his client.  Most states, including the state of Florida, recognize that confidential communications between a CPA and client are privileged. Only the client can waive the privilege unless the CPA is compelled to answer questions pursuant to a valid court order or subpoena.

      The Internal Revenue Code, Title 26 United States Code, Section 6103 provides that IRS employees must not any return information concerning a taxpayer to an unauthorized third party.
However, if properly served with a grand jury subpoena by a special agent a CPA is required to appear before the grand jury and answer questions properly posed by the Assistant United States Attorney assigned to the grand jury proceedings.

     The CPA should not disclose any information until the client has been given notice of the summons or subpoena. Voluntary meetings with agents without the consent of the taxpayer will often be viewed as an ethical violation by the CPA.

     Notifying the taxpayer affords the client the opportunity to object and to move to quash any subpoena that may be served upon the CPA.  If the CPA is served with a subpoena to appear before the grand jury in a criminal matter the CPA must answer the questions presented inside the grand jury room. However, this will only occur if the client fails to move to quash the subpoena or his motion is denied.  If the client fails to move to quash the subpoena he has waived his right to argue that the CPA was not compelled to testify or acted unethically.

            Perhaps more importantly, by only answering questions before the grand jury the CPA is assured that both the questions and answers have been taken down verbatim by a certified court reporter.  The transcript will be made available to all parties if the CPA is ever required to testify at trial.  The odds of an argument as to what was specifically asked and what the precise response was is greatly reduced.  This protects the CPA and helps insure a fair trial.

     In summary, a CPA has an ethical obligation not to voluntarily discuss his client’s affairs without obtaining the client’s prior express consent.  This includes interviews by special agents.

Tax Fraud Report
The Latest Criminal Tax Decisions, Selected Civil Tax Opinions and Related Economic Crimes

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