Tax News

CCH (cch.taxgroup.com) reports:

The IRS was denied access to a corporation's tax accrual workpapers because they were protected by the work product privilege. The IRS sought the workpapers in order to obtain information regarding SILO transactions engaged in by one of the corporation's subsidiaries.
Although the IRS established its prima facie
case for enforcement of a summons issued for the workpapers, since the documents sought contained attorney and tax practitioner advice and opinion regarding the possibility of, and chances of prevailing in, any future litigation with the IRS, the documents may have been protected by the attorney-client or tax practitioner-client privilege. However, because the corporation disclosed the documents to an independent auditor for SEC purposes, those privileges were waived.
That disclosure did not waive the work product privilege because it did not substantially increase the likelihood that the workpapers would be disclosed to the IRS. Further, the IRS did not overcome the privilege by establishing a substantial need for the documents.
Textron Inc., DC R.I., 2007-2 USTC ¶50,605
Other References:
Code Sec. 7572
CCH Reference - 2007FED ¶42,816F.021
CCH Reference - 2007FED ¶42,816F.25
Code Sec. 7602
CCH Reference - 2007FED ¶42,827.33
CCH Reference - 2007FED ¶42,827.5036
Tax Research Consultant
CCH Reference - TRC IRS: 21,054
CCH Reference - TRC IRS: 21,402.05
CCH Reference - TRC IRS: 21,402.35