Penalties: Asserting State-of-Mind Defense to Accuracy-Related Penalty Waives Attorney-Client Privilege
3 Pages Posted: 15 Mar 2015
Date Written: December 1, 2014
The attorney client privilege is a well-known common law rule of evidence and a fundamental element of the relationship between an attorney and a client. The privilege was developed “to encourage full and frank communication between attorneys and their clients and thereby promote broader public interests in the observance of law and administration of justice.” Despite its noble purpose, the privilege is not nearly as broad as many people believe. A recent Tax Court case illustrates how the privilege can easily be waived with respect to a tax opinion whenever a taxpayer asserts a defense to an accuracy-related penalty that is based on the taxpayer’s state of mind.
Keywords: penalty, penalties, attorney-client privilege
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