In Uncategorized on 01/16/2020 at 14:36

It’s a misdemeanor under AZ law for anyone to release the info in the registry files of AZ potteries. So when IRS subpooenas the AZ Department of Health Services for the skinny on Superior Organics, Inc., Docket No. 18726-18, filed 1/16/20, the AZ AG moves to quash.

For you civilians, in most States, the State Attorney General is the litigation lawyer for State agencies. And all States have confidentiality provisions for sensitive information in State agencies’ records.

But Judge Pugh is not impressed.

Federal privilege rules apply, says FRE 501, except where a State claim or defense is involved. AZ is not a party to this case, and isn’t suing for or defending anything.

And courts have held that State privilege doesn’t apply where a Federal question (and that includes Federal taxes) is involved. Check out the Order at p. 3 for the cases for your memo of law.

But the AZ AG argues that the AZ State agency is off the hook, via the Supremacy Clause of the U. S. Constitution (Art. VI, cl. 2),

“The Department also requests that we conclude that the Supremacy Clause of the U.S. Constitution applies here to supersede the AMMA confidentiality provision and the AMMA violation provision if we force the Department to comply with the subpoena.” Order, at p. 3.

In the tradition of Judge David Gustafson, Judge Pugh obliges. See Order, at p. 4, citing a case from USDCWDMI.

Takeaway- The State pottery files are an open book for IRS.






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