Common Errors That Can Waive the Practitioner/Taxpayer Confidentiality Privilege
1. Including privileged information in the tax return or other filings with the IRS or state.
2. Disclosing privileged information in non-governmental filings, such as financial statements.
3. Mixing privileged communications with non-privileged communications or discussions.
4. Including third parties not critical to the subject of the privileged communication in the discussions.
5. Permitting access to privileged files by staff not engaged in the privileged engagement.
6. Permitting an engagement involving privileged communications to be managed by a staff member who is not an attorney, CPA, or enrolled agent or actuary.
7. Not segregating written privileged communications in separate files.
8. Not segregating electronic privileged communications from other files.
9. Not obtaining the written consent of the client before releasing any privileged information.
10. Failing to claim the privilege when the IRS requests privileged documents or other communications.
11. Allowing the privileged information to be used for non-tax matters.
12. Disclosing the privileged information to third parties, including governmental bodies and private businesses (such as banks).
13. Failing to educate clients about the fundamentals of the privilege, thus increasing the chances that the client can inadvertently waive the privilege.
14. Not marking every privileged communication as privileged.
15. Not billing separately for privileged engagements.