Work-Product Doctrine Applicable to Documents Relating to Tax Shelter Transaction; Voluntary Disclosure of Documents Waived Tax Practitioner Privilege (Santander Holdings USA, Inc., DC Mass.)

Documents that provided advice regarding changes in the law in the United Kingdom and the United States and unwinding a corporation’s STARS transaction were protected from disclosure under the attorney-client and tax-practitioner privileges and the work-product doctrine. The corporation’s privilege with respect to documents discussing whether to enter into the STARS transaction was waived because of its advice-of-counsel defense. However, the documents concerning later changes in the law and the eventual unwinding of the transaction contained different subject matter and, therefore, the privilege had not been waived. Moreover, the tax practitioner privilege under Code Sec. 7525 was not vitiated by the tax shelter exception because the documents did not promote a tax shelter.

The corporation was compelled to produce documents prepared in response to the IRS’s audit of the corporation’s tax shelter transactions. While the law firm memorandum, which discussed IRS positions expected to be asserted in the audit, fell within the scope of the tax advice privilege, the corporation waived the privilege when it voluntarily disclosed the memorandum.

Santander Holdings USA, Inc., DC Mass., 2012-2 ustc ¶50,510

Other References:

Code Sec. 6103

CCH Reference – 2012FED ¶36,894.76

Code Sec. 7525

CCH Reference – 2012FED ¶42,816F.25

Tax Research Consultant

CCH Reference – TRC IRS: 9,052

CCH Reference – TRC IRS: 9,302

 

This entry was posted in Federal Tax Headlines, Tax Headlines. Bookmark the permalink.

Comments are closed.