U.S. District Court Orders Disclosure of Tax Accrual Workpapers, but Protects Opinion Work Product Information

On June 4, 2013, the U.S. District Court for the District of Minnesota held that certain information contained in tax accrual workpapers must be disclosed by the taxpayer pursuant to an Internal Revenue Service (IRS) summons, but that other information was protected by the work product doctrine or the attorney-client privilege. Wells Fargo & Co. v. United States, No. 10-57 (D. Minn. 2013).

The court in Wells Fargo held that the IRS was entitled to certain documents and portions of documents prepared by the taxpayer, including FIN 48 memos analyzing individual uncertain tax positions (UTPs) (with or without a cover memo from a Wells Fargo attorney), spreadsheets and interest calculation spreadsheets identifying UTPs, meeting agendas from quarterly meetings with the taxpayer’s accounting firm, and emails between the taxpayer and its accounting firm identifying specific UTPs. The court also held that the IRS was entitled to examine documents prepared by the taxpayer’s accounting firm which identified UTPs, reserve percentages or reserve amounts.

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Topics:  Attorney-Client Privilege, Disclosure Requirements, IRS, Summons, Tax Accrual Workpapers, UTPs, Work Product Privilege

Published In: Civil Procedure Updates, Finance & Banking Updates, Tax Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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