Thursday, August 30, 2007

Work Product Privilege Upheld in Textron Case

The United States District Court for Rhode Island issued a Memorandum Order finding that "requested documents [were] protected by the work product privilege."  The court denied the government's petition for enforcement of an IRS summons served on Textron Inc. and its subsidiaries "in connection with the IRS's examination of Textron's tax liability for tax years 1998-2001.  Textron had "refused to provide the requested documents on the grounds that (1) the summons was not issued for a legitimate purpose and (2) the tax accrual workpapers are privileged."  The court rejected Textron's arguments of attorney-client privilege and tax practitioner privilege. Judge Torres, however, did accept the work product privilege as a legitimate argument since the IRS "failed to carry the burden of demonstrating a 'substantial need' for ordinary work product, let alone the heightened burden applicable to Textron's tax accrual workpapers, which constitute opinion work product."

(esp) (w/ a hat tip to Stephanie Martz)

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