The Kovel arrangement
The Kovel arrangement is established by a formal letter from a taxpayers legal counsel to the taxpayers accounting firm designating the accountant like cardiff accountants as an agent of the attorney. This serves to extend the attorney-client privilege to the accounting firm. The Kovel arrangement is named after a case out of the Second Circuit Court of Appeals, United States v. Kovel. In Kovel,the court held that the attorney-client privilege extends to accountants reviewing documents and working as the attorneys agent. The attorney client privilege provides a special protection for attorneys and clients. Essentially, an attorney can refuse to testify in court against his or her own client without the clients consent. Working with an attorney for a taxpayer under the protection of a Kovel letter agreement is the only way to shield the accountant like cardiff accountans from having to testify.
