Supreme Court Hears Arguments on Alternative Attorney-Client Privilege Test.
Oral arguments before US Supreme Court on 1/9/23 involving subpoenas of recorded communications comprised of both of tax and legal advice. In re Grand Jury, concerned unnamed law firm providing international tax services being held in contempt for refusing production of ‘dual-purpose communication documents’ relevant to a criminal investigation of a corporate client.
Federal government asserted “that the communications at issue… overwhelmingly involve client discussions with a nonlawyer accountant, were not entitled to the attorney-client privilege.” And because of this, said communications “sought tax preparation advice that did not require a lawyer’s expertise rather than legal advice protected by the privilege,” per the government’s brief. In reply, the petitioners argued that the primary purpose test is flawed and proposed alternative approach, “a “significant purpose test”’ to determine “the degree of different forms of communications when there are multiple.” As “[i]t ensures that communications properly subject to the attorney-client privilege are reliably and predictably protected from disclosure, and it poses no material risk of abuse.”
House Passes Measure Clawing Back Nearly $80 Billion from IRS “The IRS does not need a raise. It needs a reckoning,” (R) Jason Smith. Measure not expected to pass; Biden administration issued a Statement of Policy affirming veto. Senator (D) Charles Schumer, “this is a giveaway to the multimillionaires and big corporations, and Democrats won’t let it happen.” The $80 billion in funds was part of the Inflation Reduction Act (PL 117-169) passed in 2022 and meant for IRS hiring 87,000 employees and updating technology systems.
Alter-Ego Back on Enforcement Table: IRC 7403: SJ granted on collection complaint against married couple when taxpayers not found to raise “genuine” material fact disputing validity of tax liens or whether entity served as their alter ego. Alter ego evidence “overwhelmingly” showed that couple completely dominated and controlled said entity. (U.S. v. Buckardt, CA 9, 131 AFTR 2d ¶2023-302)
IRC 7609 and 3rd Pty Summons, Foreign Investigations: 9th Cir. denied rehearing petition in summons enforcement case. (Puri v. U.S., CA 9, 131 AFTR 2d ¶2023-303)
IRB 2023-01: IRS Issues Annual Revenue Procedures:
+ Rev Proc 2023-1, 2023-1 IRB 1, supersedes Rev Proc 2022-1, 2022-1 IRB 1 and revises the rules for obtaining PLRs and information letters issued by: Corporate, Employee Benefits, Exempt Organizations, and Employment Taxes, Financial Institutions and Products, Income Tax and Accounting, International, Passthroughs and Special Industries, and Procedure and Administration. This document also includes obtaining determination letters from Large Business and International (LB&I), Small Business/Self Employed (SB/SE), Wage and Investment Division W&I), and Tax Exempt and Government Entities (TE/GE) divisions.
+ Rev Proc 2023-2, 2023-1 IRB 120, concerns technical advice memoranda (TAMs) and the rights a taxpayer has when a field office requests a TAM.
+ Rev Proc 2023-3, 2023-1 IRB 144, revises the list of tax issues for which the IRS will not issue letter rulings or determination letters.
+ Rev Proc 2023-4, 2023-1 IRB 162, updates IRS advice under the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division, Employee Plans Rulings and Agreements, and the procedures that apply to requests for determination letters and private letter rulings.
+ Rev Proc 2023-5, 2023-1 IRB 265, explains the IRS’ process for issuing, revoking or modifying determination letters on tax-exempt status, private foundation status, and other determinations related to tax-exempt organizations subject to exception. It also addressed exhausting administrative remedies for purposes of declaratory judgment under Code Sec. 7428 and applicable user fees for requesting determination letters.
+ Rev Proc 2023-7, 2023-1 IRB 305, lists the subject matter areas for which Associate Chief Counsel (International) will not issue rulings.