No Supreme Court Review in Deloitte

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September 27, 2010

The government has decided not to seek certiorari in the Deloitte case, thus leaving the law in some disarray with respect to the assertion of work-product privilege for tax accrual workpapers.  Taxpayers in the First Circuit and the Fifth Circuit will have difficulty asserting the privilege; taxpayers in the D.C. Circuit will be on solid ground.  If the IRS contests an assertion of privilege by a taxpayer located in another circuit, the parties will be left to duke it out and try to persuade the court of the relative merits of the Textron and Deloitte approaches.

As noted in our … Read More

No Rehearing in Deloitte

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August 20, 2010

Confounding the expectations of this observer (and others), the government has allowed the deadline to pass without seeking rehearing of the Deloitte case in the D.C. Circuit.  That development does not mean, however, that the government has decided to live with the Deloitte decision.  To the contrary, the most likely explanation for the government’s inaction is that it plans to seek Supreme Court review and does not want to delay that process.  A petition for certiorari is currently due on September 27.  If the government files by that time, the Court will act on the petition in enough time for … Read More

D.C. Circuit Declines to Follow Textron

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July 6, 2010

The D.C. Circuit has now decided the Deloitte case that was previously discussed on this blog.  (See D.C. Circuit Considers Work Product Issues in Deloitte for that discussion and links to the briefs in the case.)  The decision addresses two basic issues, and on both scores it gives comfort to taxpayers who do not want to furnish the IRS with their counsel’s candid assessment of litigation prospects on potential tax disputes.

With respect to the mental impressions of taxpayer’s counsel embodied in documents that are acknowledged to be work product, the court held that a taxpayer does not waive the … Read More

D.C. Circuit Considers Work Product Issues in Deloitte

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June 22, 2010

The Supreme Court’s recent denial of certiorari left intact the First Circuit’s en banc decision in United States v. Textron, Inc., 577 F.3d 21 (1st Cir. 2009), holding that Textron’s tax accrual workpapers had not been created “in anticipation of litigation” and therefore were not entitled to work product protection.  The Supreme Court’s decision, of course, does not make Textron the law of the land, but rather leaves considerable uncertainty over whether other circuits will follow the First Circuit’s lead or instead place greater weight on a company’s interest in protecting from the IRS the company’s lawyers’ assessments of … Read More