IRS audit question...

Question

You are an accountant and a client of yours is under audit by the IRS. The Revenue Agent contacts you after she has spent some time investigating the taxpayer’s records. She says that there are certain items that she has not been able to locate and she wishes to review your work papers, retained copies of returns and files.

A. Do you grant her request?

B. Assume that the revenue Agent sent you a letter stating that under Code Section 7602 she has the right to request, review and copy the records and that she is formally requesting them. Do you comply with her request?

C. If you turn the records over under either or these circumstances, do you expose yourself to any potential liability to your client?

Answer 1

Yes--generally a practitioner is required to provide the records (per IRS Circular 230) unless they believe in good faith and on reasonable grounds that the records or information are privileged.

Source:  read more at page 15   http://www.irs.gov/pub/irs-pdf/pcir230.p...

Answer 2

It is better to comply with the request and show your information.  Because if you don't then your tax return could be assessed with the proper documentation and you will then OWED IRS>