Taxpayer 2, Government 1 in Recent Privilege and Work-Product Disputes: Countryside v. Commissioner, Valero Energy Corp. v. United States, and United States v. Deloitte & Touche


On June 8, 2009, two decisions were published which address the scope of the federal practitioner privilege under Internal Revenue Code section 7525 and the protection of work-product for documents disclosed to independent auditors. Both cases are defeats for the Government. The first, Countryside, continues the rehabilitation of the statutory privilege for tax practitioners while the second, Deloitte, continues a trend of cases holding that the work product protection is not waived for documents disclosed to outside auditors in the course of financial audit. On June 17, 2009, the Government prevailed in an appeal to the Seventh Circuit in Valero regarding the scope of the so-called “tax shelter” exception to the section 7525 privilege.

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