Did you know that the Internal Revenue Service will pay money to people who inform it of those who fail to pay taxes owed? Depending upon the case, the goverment will pay the whistle blower up to 30% of the taxes that should have been paid. Does this mean that if your CPA learns that a deduction you’ve taken is not allowed, he or she can turn you in and collect? No, Colorado law mandates that most communications between a client and his or her CPA are considered privileged. In most cases, CPAs may not divulge information provided by their clients without their clients ‘ consent. C.R.S. 13-90-107(f)(I).
For more information about the Federal whistle-blower program, go to irs.gov and look for IRS Form 211.