For Richer or Poorer

You've worked for years preparing the tax returns of Rose and Eric Contreras. The couple's returns were all joint returns, but you were hired by and have only dealt with Rose. The two are now engaged in a divorce proceeding. During the process, you receive a phone call from Eric.

"I want to see all the details of those tax returns," he says. "I need to know if she was hiding anything!" Rose anticipated Eric's demand and has already asked that you refuse, claiming that she does not want her confidential information disclosed.

Evaluating threats requires being reasonable, applying both your knowledge of the rules of the accounting profession and your ethical judgment. Guiding principles such as integrity, objectivity, due care, and compliance with standards can form the foundation of good decision$-$making.

However, at times, two or more of your principles may appear to be in conflict, such as when you want to honor confidentiality while complying with standards. Reasonable judgment, supported by careful examination of the rules, can lead to a sense of how threatening the conflict actually is$.$

$2$ of $4$

What level of threat to client confidentiality would releasing the tax returns to Eric present?

No significant threat. Because both parties are involved in the litigation, Eric might escalate his request and get a subpoena if you refuse to give him the documentation.

No threat. Because the returns were filed jointly and signed by both parties, Eric is just as much your client as Rose and entitled to copies of the returns.

Significant threat. Rose is your client and you may need to provide her services during the divorce proceedings. Providing Eric with the documents would not only violate Rose's confidentiality, you may also be interfering with those future services.