Now water cooler and scuttlebutt have been succeeded by that which began as servants, became the masters, and are now the enemy: the internet and the chat.

Judge Elizabeth Crewson Paris tells us all about it in Econfina Resources, LLC, Econfina Corporation, Tax Matters Partner Docket, No. 12980-22, filed 3/21/24. This is but one of six (count ’em, six; see Order, at p. 1, footnote 1) cases sprung from the subdivision of a parcel of Dixieland Boondocks, whereon are found, to judge from the valuations thereunto ascribed, some or all of the Fountain of Youth (sorry, Ponce de Leon, ya blew it), the Philosopher’s Stone, and dilithium crystals.

Judge Elizabeth Crewson Paris has to deal with an attempted IRS OCC clawback of an offhand chat remark by a Chief Counselor to a suggestion by the Group Captain to hit all Dixieland Boondockers with Section 6663 fraud chops. As is not infrequent, the chatgroup inadvertently included “a former partner of petitioner’s counsel’s firm.” Order, at p. 2.

“Can you claim fraud without the classic badges?” asked the Counselor. “Ha ha and ho ho,” yell the Econfinas, “bad faith! Scrap the fraud chops!” IRS ripostes with “deliberative privilege, seal it all.”

Judge Elizabeth Crewson Paris tells both sides she isn’t having it.

“Nothing in the group chat for which respondent asserts the deliberative process privilege reveals information of the kind the privilege was meant to protect. Those messages reveal no policy deliberations and, by respondent’s own admission, are an informal discussion among Chief Counsel attorneys. There are no modes ‘of formulating or exercising policy-implicating judgment,’…, nor do the messages ‘directly contribute to the formulation of important public policy,.” Order, at p. 3 (Citations omitted).

IRS initially suggested attorney work product, but abandoned that claim.

The Econfinas want Judge Elizabeth Crewson Paris to reconsider her order allowing IRS to amend the answer to assert the Section 6663 chops, claiming the chatting is new evidence.

“The group chat may be evidence relating to an alleged fact that must be proven or disproven at trial, namely, whether respondent obtained the supervisory approval necessary to satisfy section 6751(b), but it does not constitute ‘new evidence.’” Order, at p. 4.

Nothing is sealed, everything goes in.

Taishoff says that while Judge Elizabeth Crewson Paris is constrained by copious citation of precedent to restrict deliberative privilege to the most formal, high-level, appropriately labeled and protected Sinaiatical conclaves, that isn’t the only way policy is formulated. Apparently unbeknownst to the judiciary at the highest level, the internet exists, and people use it for everything. It has abolished time and space, to the extent that the world has shrunk from a village to the size of an iPad. That’s how we roll in the Twenty-First Century. Time for the higher courts to recognize this.

As for the “seal everything” approach, it’s time to put that gambit away. The ancient Japanese saying is right: “A word spoken, even the Emperor’s horsemen cannot bring it back.”