Case: Documents May Be Privileged Pertaining to IRS Audit of International Business Dealings (N.D. Cal.) (IRC §7525)

Privileges may apply to withheld documents in IRS summons, but special master must review such documents first, a district court held. Pursuant to an IRS investigation into the international structure of businesses used to divert income by Taxpayer Wife and Decedent Husband, six summonses were issued. Taxpayer Wife supposedly produced over 70,000 pages of documents, but claimed the rest were privileged under the joint defense rule, tax practitioner privilege, attorney-client privilege, work product doctrine, and a Kovel agreement. The court first held that the joint defense rule was inapplicable to communications between Taxpayer Wife and the founder and board member ...