US Tax Court says IRS’s ‘drift-net’ argument to expand privilege waiver must be anchored in principles
Source: McDermott Will & Emery via internationallawoffice.com 17 November 2017
“In cases where privilege is waived by asserting a reasonable-cause defense (to penalties), the question is the scope of the waiver.
Some courts have applied a fairness test to limit the scope of the waiver to reasonably contemporaneous documents, thereby not extending the scope of the waiver to legal advice rendered at a later date.
Estate of Levine is consistent with a recent pattern of the IRS aggressively arguing against the assertion of privilege and work-product protections in tax audits.
Taxpayers should carefully scrutinize IRS attempts to obtain privileged documents, and resist the IRS’s attempts to expand the waiver concept beyond reason and principle.
Courts are rightly reluctant to vitiate protections against disclosure, especially when the government’s arguments are full of holes!”