Summons Production Ordered from Law Firm for Client Documents in Its Possession (4/14/11)

In United States v. Sideman & Bancroft, LLP (ND CA 4/8/11 - No. 3:11-cv-00736), the court enforced a summons issued to the taxpayer-target's criminal defense attorneys, Sideman & Bancroft LLP ("Sideman"). The facts were: The taxpayer had delivered the documents in question to her return preparer, an enrolled agent. Then, while the return preparer held the documents, the IRS obtained a search warrant for the taxpayer's residence and business premises. The documents were within the description contained on the search warrant, but, of course, the IRS did not find the seize the documents because they were at the return preparer's office. But the agent did find documents referring to the return preparer.  During the execution of the search warrant, the taxpayer talked with the return preparer and then went to the return preparer's office to sign one of the returns. After the taxpayer left, the return preparer realized that she had documents within the scope of the search warrant. She called the taxpayer's attorney, a Richard Guadagni to advise and have them delivered to the IRS. Guadagni took possession of the documents later that day but delivered them to the taxpayer's new attorney, Jay Weill with Sideman. The return preparer said that she would not have given the documents to Guadagni if she had known he would not deliver them to the IRS. Apparenltly, the return preparer advised the IRS of the description of the documents and, using the description, the IRS summonsed from Sideman.

The Court held that:

1. The documents, although then in the possession of the attorney, were not subject to an attorney-client privilege but 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. Hence, there was no testimonial compulsion as to the contents of the documents.

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

a. The existence and location of the documents are a "foregone conclusion," so that the taxpayer's or her attorney's production is of minimal testimonial significance.
b. The authenticity prong of the foregone conclusion doctrine was satisfied because the return preparer could authenticate the documents independent of any testimony from the taxpayer's or the attorney's act of production.
c. The court noted in the footnote in the opinion that, as to the testimony inherent in determining which documents are described in the summons and thus responsive to it, the taxpayer's attorney did not assert this position in the briefing and mentioned it without explanation, so the court did not address it.  [JAT Note:  Of course, assuming the two attorney maintained the integrity of the documents as they were were when the return preparer delivered them to the first attorney, there would be no substantial requirement on the part of the taxpayer to identify the documents summonsed.]