What does FATP stand for?

7525 extends the common law protections of attorney client privilege to a client who is communicating with a federally authorized tax practitioner regarding tax advice.

The preamble to the final regulations provides that Treasury and the IRS have concluded that the federally authorized tax practitioner privilege generally does not apply to communications between a taxpayer and a registered tax return preparer because the advice the preparer provides is ordinarily intended to be reflected on a tax return and is not intended to be confidential or privileged.

Treasury's standards of conduct for federally authorized tax practitioners.

The proposed regulations (REG-138637-07) would bring previously unregulated preparers--the new category of what the IRS calls "registered tax return preparers"--within certain standards of Circular 230, which currently governs federally authorized tax practitioners.

If the communication (and physical information directly pertaining to it) qualifies as privileged, then that information is not discoverable by the IRS or government attorneys in the event of a tax controversy The claim of privilege actually belongs to the taxpayer with respect to communication between them and their attorney or any other federally authorized tax practitioner CPA, an enrolled agent or an enrolled actuary.

The Tax Court held that the tax shelter exception to the tax practitioner/client privilege did not apply to documents in the form of the minutes of meetings between a partnership and a federally authorized tax practitioner because the tax advice in the documents was not given in connection with the promotion of a tax shelter.

A corporation's response to Announcement 2002-63, which is part of the IRS's effort to identify and crack down on abusive tax shelters, requires--(1) a thorough understanding of the contours of the attorney-client privilege, the federally authorized tax practitioner privilege, and the work product doctrine; (2) an awareness of the implications of disclosing tax accrual workpapers to the corporation's independent auditors; and (3) the development of internal policies to best protect the analysis underlying the corporation's tax contingency reserve.

If the IRS director of practice institutes a grievance proceeding against a federally authorized tax practitioner, the complaint will seek the disbarment or suspension of the regulated professional from further practice before the IRS pursuant to a 31 C.