Question

John Jones, CPA, has been in business preparing tax returns for 20 years. On January 2, 2013, without consent of his clients, Mr. Jones “compiled a list of specific taxpayer information which could be used to contact taxpayers on the list to provide tax information and general business or economic information or analysis for educational purposes.” (Maples, 2009, p.68) according to IRS ruling, as issued under SEC. 7216.gob (also see T.D. 9608), are the actions of Jones considered a violation in the disclosure of client confidentiality? If so, could his actions result in Mr. Jones being charged with a criminal misdemeanor involving a maximum penalty of $1000 or one year in prison, or both, plus cost of prosecution? Required: Did John Jones violate client confidentiality? What is your opinion?

Answer 1

The recently revised AICPA Code of Professional Conduct includes a new Confidential Client Information Rule under Section 1.700.001, which expands the guidance on maintaining the confidentiality of client information.

The general thought previously has been that if CPA tax practitioners were complying with and revisions of its related regulations that went into effect six years ago , they were complying with the less detailed AICPA code Rule 301, Client Confidential Information.

Now that the new AICPA guidance with its expanded interpretations, members are encouraged to assess their practices for compliance with both sets of rules.

Conclusion: Disclosure of Client Information to Third Parties is related to confidentiality . So, A practicing CPA can't share his details to third party. A CPA can disclose his Client Information to third party only when it is required by law or if client has given the permission. Mr. Jones is penalised with $1000 or one year of Prison Sometimes Both it is based on the judgement given by Relevent Officer.