In Uncategorized on 04/14/2020 at 13:08

Privilege characters, that is, those whose studies of evidentiary rules concentrate on evidentiary privileges, such as client-attorney and governmental deliberative privilege, and 6103 confidentiality, will find Thomas Shands, Docket No. 13499-16W, filed 4/14/20, a mine of DC Cir and allied learning on those topics.

STJ Diana L. (“Sidewalks of New York”) Leyden has outdone herself. As set forth in the above-cited, she ordered the parties to do simultaneous memoranda of law on DC Cir’s take on client-attorney privilege in light of the 61 (count ‘em, 61) Ogden Sunseteers who could peek at the info on e-Trak, and the impact of Section 6103(k)(13)’s bukh to blowers provision. Y’all will recall STJ Di’s interest in Section 6103(k)(13) from my blogpost “Taxpayer First,” 8/2/19.

Spoiler alert: the parties agree Section 6103(k)(13) plays no role here. Notwithstanding anything otherwise or to the contrary hereinabove set forth, as my high-priced colleagues would say,  STJ Di dishes on all of it in 23 pages.

A quick summary follows, but you privilege characters will want to read and heed in depth, grabbing citations for law review articles, memos of law and casual conversazioni.

No problem with the 61 peeking at e-Trak, IRS’ case management system. “The Court finds that the number of employees who could have accessed the e-Trak system does not, in and of itself, defeat the confidentiality of the communications in the e-Trak system. Further, the Court finds that the system for obtaining authorization to access the information along with the penalties for willfully accessing information that is not authorized assures that the persons who accessed the e-Trak system entries were assigned to process petitioner’s claim and, therefore, needed to know the information, and that the communications were not transmitted outside the WBO.” Order, at pp. 8-9.

If you’re interested in waiver of client-attorney, STJ Di has something for you. “Assuming, without finding, that the application of the attorney-client privilege would deny petitioner access to information vital to his appeal, petitioner has failed to prove the first two conditions required to establish respondent impliedly waived the privilege. Respondent has not asserted the attorney-client privilege as a result of an affirmative act, such as filing suit or asserting an affirmative defense, nor has respondent through an affirmative act put the protected information at issue by making it relevant to the case.” Order, at p. 9.

And deliberative privilege gets a going-over from STJ Di. “Petitioner has not asserted that his need for disclosure outweighs the harm that disclosure may do to intragovernmental candor.

“As to petitioner’s assertion that respondent engaged in misconduct, the Court finds that petitioner has not shown that the WBO engaged in misconduct. The length of time respondent took to make a determination of petitioner’s claim is not, in and of itself, evidence of misconduct. Therefore, the Court does not find any basis not to apply the deliberative process privilege claimed by respondent….” Order, at p. 13.

And STJ Di has an extra. When information, and not paper or electrons, is sought, use interrogatories, not document production demands. See Order, at pp. 18-19.

Although STJ Di says the parties agree Section 6103(k)(13) plays no role here, she has plenty to say about Section 6103(h)(4)(B). This enactment lets IRS dish about matters directly related to a judicial proceeding.

“Section 6103(h)(4)(B) does not define ’directly related’. The legislative history of section 6103(h)(4)(B) indicates that it was created to provide a limited exception to the general nondisclosure rules for a taxpayer who is seeking to resolve his or her tax liability but only with respect to the treatment of an item reflected on the return being sought that was directly related to the resolution of the taxpayer’s tax liability.” Order, at p. 15.

Contrast this with Section 6103(h)(2)(B). STJ Di does, and comes up with this.

“’By using “directly” to modify “related to” language in § 6103(h)(4)(B), Congress intended an even narrower exception to apply for disclosure to members of the public in judicial proceedings’. In re United States, 669 F.3d at 1338. Therefore, the Court declines to adopt petitioner’s assertion that evidence that may be relevant and lead to admissible evidence would be directly related to petitioner’s issue. Rather, the Court examines the documents to determine if they are directly related to petitioner’s claim that information he provided in connection with the prosecution of the targets was the basis for the IRS to create the 2011 OVDI program and what spurred the unnamed taxpayers to file under that program for the period noted.” Order, at p. 16.

Of course, there’s more, but I don’t want unduly to try the patience of the unprivilege characters who may stumble upon this my blog.


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