Wells Fargo Takes Up Cudgel to Protect Tax Accrual Workpapers


The IRS, trying to capitalize on the Textron decision, is engrossed in litigation with Wells Fargo over tax accrual workpapers in the U.S. District Court for the District of Minnesota. This case may well work its way to the U.S. Court of Appeals for the Eighth Circuit and beyond.

On September 1, 2010, Wells Fargo & Company asked a federal district court in Minnesota to quash a summons issued by the U.S. Internal Revenue Service (IRS) to Wells Fargo’s independent auditor seeking “all of the Tax Accrual Workpapers for … taxable years ended December 31, 2007, and December 31, 2008” (hereinafter known as the Auditor Summons). Wells Fargo v. United States, No. 10-mc-57 (D. Minn.). The Auditor Summons defines these documents as “any and all analyses, computations, opinions, notes, summaries, discussions, and other documents relating to such reserves and any footnotes.” On November 1, 2010, the government filed a response seeking to enforce the Auditor Summons and asking for a hearing. In a related case, the government asked the same court to enforce summonses issued to Wells Fargo seeking the same documents and corresponding witness testimony. The court combined the two cases and, based on the court filings, an evidentiary hearing appears imminent.

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