Burrowing Creatures: cover or size reduction?

[Berandor]

Hi!

What happens if a creature burrows up to a character and attacks him from his burrows?
Do you grant cover bonus or do you reduce the size of the target?

I think it would be by the rules to grant a cover bonus, but then the size penalty to AC will probably be negated and even surpassed.
If you reduce the size of the creature AC-wise, then it won't be that much of an advantage.
What do you think?

Side note: creatures with a tail attack in this situation: can they use it? Or is the tail burrowed in the earth and remains unused?

Berandor

 

[Darklone]

I always used concealment... As for the tail attacks: No facing, no head out of the earth, therefore tail attacks allowed (it might have turned around).