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Legal duties and responsibilities

REG Chapter 4 · Area I · Blueprint I.D

A tax adviser's mistakes can cost a client real money, and sometimes people who were never clients rely on the adviser's work too. This chapter covers when a CPA is liable under the common law (for breach of contract, negligence and fraud), to whom, and what the client or a third party can recover. It ends with what a CPA must keep secret and when communications are privileged from the IRS. Harbor Lane's own near-miss with a client named Tomas Reyes runs through every lesson.

In this chapter

1. Duties to the client under contract
2. Negligence: the duty of due care
3. Liability to third parties for negligence
4. Fraud: actual and constructive
5. Privileged communications in tax practice
6. Confidentiality and privacy rules

This chapter has 6 lessons, 50 practice MCQs with explanations and 20 simulations, plus flashcards and a recall sheet.

What this chapter covers

• Common law liability to clients and third parties
• negligence and fraud
• privileged communications
• confidentiality and privacy rules

Chapter 3: Federal tax procedures and taxpayer penalties · Chapter 5: Agency