Jan 20, 2021

Federal Criminal Subpoenas: Do I Tell My Client I Received One?

Written by: Beverly Aloisio DeLaune 

It is not uncommon for CPAs to be served with federal criminal subpoenas seeking information regarding accounting services rendered to clients. These subpoenas sometimes are accompanied by a cover letter from the issuing Assistant US Attorney (“AUSA”) or the investigating officer (FBI, investigative division of the IRS or FDIC) requesting the CPA not disclose the existence of the subpoena to the CPA’s client.[1] This begs the question of whether the CPA should, and legally can, disclose the existence of the subpoena to their client.

Unless the issuing court has ordered the matter be sealed, the AUSA or investigating officer cannot prevent the CPA from advising his or her client of the subpoena. However, the lack of an order requiring silence actually puts the CPA in a more difficult position, as the CPA must now balance the federal government’s request with the CPA’s relationship and obligations to their client.  This is one of the situations a lawyer can help a CPA work through. For example, when we are engaged to assist with a subpoena response,[2] we usually contact the issuing AUSA to advise that our client would like to disclose the subpoena to his or her client.  Most times, the AUSA has no objection. However, in some circumstances, the AUSA may ask that the CPA not disclose the subpoena and scope of requested information to the client.  What is the CPA to do at that point? 

The AICPA guidelines provide help on this issue. AICPA Standard 1.700.100, governing “Disclosing Confidential Client Information as a Result of a Subpoena or Summons,” states:

.01 The member’s disclosure of confidential client information in compliance with a validly issued and enforceable subpoena or summons would not violate the “Confidential Client Information Rule.” [1.700.001].

.02 When complying with such subpoena or summons, the member is not required to notify the client that its records have been subpoenaed or that a summons related to the client’s records has been issued. The member may also wish to consult with legal counsel to determine the validity and enforceability of the subpoena or summons and the specific client information required to be provided. The member may also wish to consult with his or her state board of accountancy. (emphasis added).

It is still a choice the CPA will have to make based upon the specific circumstances, such as whether the CPA is still providing services to the client, the type of relationship the CPA has with the client (friend of the family, family member, church member), statements made by the AUSA, comments from counsel after consultation and whether the CPA feels deceived by the client. Nonetheless, the AICPA guidelines make clear that the CPA can choose not to notify the client of the subpoena.[3]

[1] Sometimes the language looks more like an order than a request.

[2] Many errors and omissions policies also provide ancillary coverage to provide their insured CPAs with subpoena response assistance counsel, often free of a deductible.

[3] In many states, including Louisiana, the state legislatures have created specific laws governing the disclosure of accounting records and information. For instance, in Louisiana, accounting records are protected by an accountant-client privilege and accountants are prohibited from producing such information without the consent of the client or an order (not subpoena) from the Court issued after a contradictory hearing. Please consult an attorney to determine your state’s specific laws and requirements and whether state law may prohibit production even in response to federal subpoena. (Louisiana’s accountant-client privilege does not apply to a federal criminal subpoena, but may apply to a federal civil subpoena.)