Attorney-at-Law

STATE LAW CONFIDENTIAL

In Uncategorized on 01/28/2019 at 14:57

The information sought by IRS may be protected by State laws, but that doesn’t help Verde Wellness Center, Inc., Docket No. 23785-17, filed 1/28/19, an AZ pottery. The AZ Dep’t of Health Services tries to quash an IRS trial subpoena, but Judge Buch quashes the AZ Health types, using Art. VI, cl. 2, known to the cognoscenti as the Supremacy Clause. Any State law that hinders or conflicts with Federal law is inoperative. Constitutionally.

“In the tax area, courts have often addressed the question of whether a privilege created by state statute is to be recognized, specifically with regard to the accountant-client privilege often created under state law. The Supreme Court addressed this in Couch v. United States, 409 U.S. 322, 335 (1973), holding that ‘no confidential accountant-client privilege exists under federal law, and no state created privilege had been recognized in federal cases.’ See also, United States v. Arthur Young & Co, 465 U.S. 805 (1984). Except where the Federally authorized tax practitioner privilege of section 7525 applies, this remains the law today. This remains true even when (like here) the records are in the possession of the State and disclosure of the State’s records is a crime under State law.” Order, at p. 3.

Since the AZ Health types could face jail time for disclosing what IRS wants, they ask Judge Buch, if he rules for IRS (spoiler alert: he does), to let them off the hook.

“…Federal supremacy renders the confidentiality provision of the Arizona Medical Marijuana Act (and its corresponding criminal sanction) inapplicable insofar as responding to the Commissioner’s subpoena is concerned.” Order, at p. 5.

Thanks Judge. Isn’t it great to be back?

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