What may not be clear in such situations, however, is the minefield of compromises such tensions create. This article addresses one such tension—the preservation of the attorney-client privilege—and provides some reassurances and potential pitfalls for California attorneys. In most situations, California law protects information disclosed between a policyholder and its insurance company, and limits what a policyholder has to provide to its insurers in subsequent coverage disputes.
The majority in Textron effectively created a new and troubling standard for protecting documents under the work product doctrine. The Textron decision also has implications in the state tax arena. It also is possible that providing workpapers to one state department of revenue could result in the waiver of work product protection in other states, regardless of the other state's standards for determining when work product protection applies.
In addition to Textron related issues, the IRS Commissioner and IRS Chief Counsel are attempting to modify the general relationship that the IRS has with large taxpayers, mostly in a favorable direction, with an emphasis on tax risk management and transparency.
For example, the IRS has recently issued Announcementwhich effectively paves the way for the IRS to receive a road map that identifies uncertain tax positions of certain large corporate and partnership taxpayers. One of the key components from an in-house perspective will be defining the line between collaboration and protecting privilege material, as well as ensuring that internal tax risk management policies are adhered to in a consistent and uniform manner.
While the decision in Textron clearly has broad implications, the following discussion focuses on the best practices to protect tax documents from discovery by a taxing authority. The issue of privilege protection is particularly relevant with respect to Attorney client privilege research paper related documents.
For example, tax documents could provide a roadmap of the technical issues and best arguments for taxing authorities to follow. Furthermore, tax documents may present facts and issues in a less favorable light.
For these purposes, tax documents include tax related memoranda, opinions, and emails, as well as various tax reporting financial data, which generally are referred to as tax accrual workpapers.
Determine the actual need, as opposed to the desire, for your outside auditor to review potentially protected documents. There is a potential to retain applicable attorney-client privilege if, instead of disclosing the technical tax analysis with respect to a given issue, an internally prepared summary with the factual background and conclusion is provided to your outside auditor.
Such summary could be combined with a discussion with company personnel knowledgeable about the relevant facts and analysis. No privilege waiver issues should be implicated with respect to purely computational type documents.
Permit the outside auditor to review only necessary documents and do not allow copies to be made or retained. It likely is inevitable to share some potentially privileged documents with an independent auditor in order for the auditor to attest to your tax reserves.
Once a document has been shared with your auditor, the attorney-client privilege is waived, although the document may continue to qualify for work product protection, as applicable.
Note that audit documentation may take the form of auditor-prepared summaries of the inspected documents, rendering copies of client-prepared documents unnecessary.
Meticulous records of what is shown to the auditor to should be kept in order to maintain privilege protection for items that were not shared.
In addition, a non-disclosure letter should be executed as part of the engagement with the auditor. Such letter should contain statements similar to the following: Make minimal references to the content of privileged materials in financial accounting documents. Request that your outside auditor as well as your controller group make minimal references to the content of privileged materials in preparation of their own audit workpapers.
Ask to review the content of such workpapers to confirm their content. Define the role of your internal attorneys. Use lawyers to create work product related materials. However, it is easier to illustrate that a document is work product when an attorney, or a person working for the attorney, prepares it.
Consider giving legal titles to those in the tax organization whose primary role and function is to provide legal advice, as opposed to business, tax return, or financial accounting advice.
In addition, separate legal advice from non-legal advice e. Furthermore, in house litigation counsel should be engaged in the process of determining whether litigation is anticipated with respect to tax issues. When rendering or requesting legal advice, omit people that do not need to see the legal advice.
Make appropriate references to the potential for litigation and the likelihood of success if challenged in court by the IRS or other taxing authority in technical discussions. In technical memoranda, opinions, and other communications, specifically discuss the potential litigating aspects of the issues, as well as the likelihood of success on the merits.
As appropriate, clear legends on the face of documents e.(a) A “lawyer” is a person authorized, or reasonably believed by the client to be authorized, to practice law in any state or nation.
(b) A “client” is any person, public officer, corporation, association, or other organization or entity, either public or private, who consults a lawyer. The Attorney- Client Privilege is the agreement between an attorney and their client that mandates the communication between the two parties to be fully confidential and .
The tools you need to write a quality essay or term paper; Saved Essays. You Have Not Saved Any Essays. Topics in this paper.
and the attorney-client privilege does not provide grounds upon which plaintiff can base its claim of reasonable cause warranting a waiver of the penalty assessed against it by the IRS. All papers are for /5(4). B. Differences Between the Attorney-Client Privilege and Work Product Doctrine C.
Role of Paralegals in Creating the Protection D. Overcoming the Work Product Protection E. Role of Paralegals in Avoiding Waiver of the Work Product. Keywords: ethics, defense, judicial ethics, attorney-client privilege ETHICAL DILEMMAS IN DEFENDING THE FACTUALLY GUILTY 3 Ethical Dilemmas in Defending the Factually Guilty Client Although the Constitution of the United States does not cite it explicitly, the presumption of innocence or a lack of legal guilt is widely held in the 5th, 6th, and.
Judge Johnston’s opinion addresses the privilege head-on, and I recommend his opinion as the starting place for any lawyer’s research on (1) the legal analysis for recognizing new federal common-law privileges and (2) the national status of the self-critical analysis privilege.