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As with other privileged communications there are exceptions as to what is privileged and what is not.
For whatever reason, many taxpayers have viewed this limited privilege as equivalent to the attorney-client privilege. Sadly, even some tax pros don't quite understand the protection afforded the client under Code Section 7525, and the few recent rulings are giving the tax preparers less sense of security. Communications between professionals and their clients other than those between an attorney and his or her client are not privileged under federal law. In cases involving federal law, state-provided rights to confidentiality of accountant-client communications are not recognized...
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