Mark Allison Comments on Privilege Case's Importance

Tax Notes Today
During the American Bar Association's Joint Fall CLE Meeting, Mark D. Allison commented on the significance of AD Investment 2000 Fund LLC v. Commissioner, which held a taxpayer had waived attorney-client privilege. For the complete article, please visit Tax Notes Today's website (subscription required).
Excerpt taken from the article "ABA Meeting: IRS, Practitioners Disagree on Privilege Case's Importance" by Andrew Velarde for Tax Notes Today.

In the case, AD Investment 2000 Fund LLC v. Commissioner, 142 T.C. No. 13 (2014), the Tax Court held that two partnerships must produce attorney opinion letters on shelter transactions if the partnerships persist in good-faith affirmative defenses to accuracy-related penalties, finding that they forfeited the attorney-client privilege by putting the partnerships' state of mind and beliefs in issue.

"It's very logical that once you put state of mind in play, the government would have a fair interest of understanding what was in your mind," Mark D. Allison of Caplin & Drysdale said September 19 at the Administrative Practice session of the American Bar Association Section of Taxation meeting in Denver. "Did you receive legal advice that contradicted the advice of your own internal advice or analysis?"

Allison added that he was confident the government knew what was in the opinion letters held by the taxpayer and that it was more interested in knowing whether the facts and assumptions underlying the opinion were contradicted by the taxpayer's internal analysis. "At the end of the day, it is probably not as dramatic an outcome as some might be concerned about," Allison said.


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