Can the Attorney-Client and Work-Product Privileges Survive the Annual Audit?

摘要

The Internal Revenue Service's (IRS's) recent pursuit of tax accrual workpapers has resulted in a first round of defeat in two U.S. federal district courts.1 Both cases were appealed to the United States Court of Appeals. If the IRS prevails, corporate executives who rely on the legal advice of attorneys in makingrndecisions may find themselves in danger of providing litigation road maps to adversaries who file suit against their companies. The potential exposure of tax accrual workpapers is a wake-up call for executives to review the procedures by which they seek and secure legal advice, whether from inside or outside counsel, to minimize the likelihood of such advice being obtained by opposing counsel.