A Primer on Tax Work Product for Federal Courts
11 Pages Posted: 17 May 2009 Last revised: 29 Jun 2009
Date Written: May 15, 2009
This article discusses the application of the work product doctrine in the tax context. It provides an overview of the burdens that an applicant seeking immunity for its tax materials must meet as well as the procedures used by courts to verify an applicant's claim for a privilege traditionally reserved for documents prepared with an objectively reasonable anticipation of litigation in mind. Moreover, it roots the discussion in the primary question currently before the en banc First Circuit in the closely watched case, United States v. Textron: Are a company's tax accrual workpapers protected from discovery under the work product doctrine?
The article concludes that tax accrual workpapers never qualify as protected work product. Corporate taxpayers create these documents to comply with federal securities law, not because of future litigation. Workpapers may discuss the prospect of future litigation or contain analyses that later become the subject of litigation. But the appearance of those discussions and analyses in documents created exclusively for regulatory purposes does not transform the documents into materials created in anticipation of litigation. And it certainly does not transform them into materials created in objectively reasonable anticipation of litigation as required by the work product doctrine. Indeed, in the event an applicant or a court attempts to justify turning regulatory documents into litigation documents, it must face the attenuated temporal connection between preparation of workpapers and future litigation. In combination with the many dispute resolution procedures available to taxpayers and the government, anticipating litigation when preparing workpapers is distinctly unreasonable both as a matter of logic and mathematical probability.
Keywords: Taxation, Tax Law, Tax Practice, Tax Shelters, Professional Responsibility, Legal Profession, Work Product Doctrine
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