District Court Enforces Summons Issued to Taxpayer’s Attorneys

Apr 18, 2011   

In United States v. Sideman & Bancroft, LLP (ND CA 4/8/11 – No. 3:11-cv-00736), the District Court for the Northern District of California enforced a summons issued to the taxpayer-target’s criminal defense attorneys, Sideman & Bancroft LLP.

In the case, the IRS obtained a search warrant for the taxpayer’s residence and business premises, and when the IRS executed on the warrant, the documents were missing because the taxpayer had delivered the documents in question to her return preparer, an enrolled agent. During the search, the IRS did, however, find evidence referring to the return preparer. The taxpayer subsequently went to the enrolled agent’s place of business to sign a return. When the taxpayer left, the enrolled agent came to the conclusion that she had documents within the scope of the search warrant. The enrolled agent called the taxpayer’s attorney to have the relevant documents delivered to the IRS. The attorney took possession of the documents but delivered them to the taxpayer’s new attorney instead of the IRS. The enrolled agent advised the IRS of the description of the documents and, using the description, the IRS issued the summons to Sideman & Bancroft.

The District Court held that:

1. The documents were not subject to an attorney-client privilege. Instead, they were subject only to such privileges as the taxpayer might assert if she retained possession.

2. The documents were not subject to a Fifth Amendment privilege because they were pre-existing documents voluntarily prepared or retained by taxpayer.

3. The production of the documents was not subject to the Act of Production doctrine pursuant to which the act of producing documents can have testimonial aspects subject to the Fifth Amendment privilege.

The attorneys at Fuerst Ittleman, PL have extensive experience dealing with civil and criminal tax matters. You can reach at attorney by emailing us at contact@fidjlaw.com.