Tax Research

ACCT 6356.501 Tax Research – Fall 2022

Name __________________

RESEARCH ASSIGNMENT 11

Tax Practice & Procedure

( Please submit as a Word document by email by 4:00 p.m. on Thursday, 11/17. )

This assignment is worth a maximum of five (5) points. Your work should be written in your own words without any “cutting & pasting” from the source docu-ment(s) cited except that very brief quotations are acceptable if properly attri-buted. Points will be deducted for –

1. spelling and grammatical errors that Word highlighted but you failed to correct;

2. other egregious errors, including substantive misstatements; and

3. material departures (in either direction) from the indicated length.

Any submissions received after 4:00 p.m. will be worth up to three (3) points only. Submissions not received by 7:00 p.m. will not be scored (zero points).

* * * *

As you know, attorneys and their clients have an important defense against the efforts of an opposing party (the IRS, for example) to obtain “discovery” of the substance of their deliberative communications – namely, the attorney-client privilege, codified in many states (including Texas) but remaining “common law” at the federal level.

As you now also know, as CPAs we (and certain other “practitioners”) may engage in tax advisory work with the same degree of protection that would be available if we were lawyers instead. But 7525 is not the only way by which an accountant’s advice or communications might be protected from IRS discovery. In fact, a special rule (or “doctrine”) was created many years before 7525 al-though it applies in rather narrow circumstances.

Specifically, this doctrine posits an accountant specially retained for the purpose of participating in attorney-client communications where tax or accounting ex-pertise is needed – in other words, to help the attorney understand the client’s issues to the extent that they involve accounting or tax concepts in which the attorney may not be well trained. Where so justified, the accountant can act as an adjunct to the attorney – as a “translator,” so to speak – without breaching the privilege’s requirement of bilateral confidentiality.[footnoteRef:1] [1: As a hint, this doctrine is commonly referred to by the name of the accountant who, many years ago and long before 7525, was brave enough to refuse to disclose advice he had provided or communications he had had or participated in on grounds of the attorney-client privilege (despite that he himself was not an attorney). He was sent to jail for refusing to testify by a U.S. District Court judge but then sprung by a famous decision of the Second Circuit Court of Appeals. It is that long-ago appellate decision that esta-blished the subject doctrine. It is still operative and important today. ]

Your task(s):

1. Dive into the secondary sources discussing the attorney-client privilege until you find information that identifies and explains this “doctrine.” Then find, read, and properly cite the original case. And, just to convince me that you actually did read the case, remind me of the name of the judge who ordered the hero-accountant to jail (“prison”).

2. Find, properly cite, and summarize any case in which this doctrine was relied on either (i) successfully or (ii) unsuccessfully in defense of the confidentiality of the attorney-client-accountant communications at issue.

Note: The privilege at issue in the case you find should be the common-law attorney-client privilege, not 7525.

Around 500-600 words should be sufficient.

8