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Work-From-Home Technology Comes With New Privilege Concerns

Posted on May. 15, 2020

Videoconferencing and other new technological tools tax professionals are relying on during the coronavirus pandemic make well-worn privilege analyses even more complicated, according to practitioners.

The standard questions about how to safeguard attorney-client privilege and protect the work product doctrine are fairly straightforward when organizing an invite-only conference call with a handful of participants, but larger calls can present more opportunities to waive the protections if the calls include non-lawyers or non-clients, Paul Butler of Kostelanetz & Fink LLP said during a May 14 webcast sponsored by the American Bar Association Section of Taxation.

“Multiply that, and the complexity of that, when you get into things like Zoom meetings, YouTube channels, Google Meets, Webex, WhatsApp, [or] iMessages. It gets really difficult to control and know everybody who’s participating in those kinds of things, and that becomes a real danger point for inadvertent waivers,” Butler said. It’s much more complicated to protect a taxpayer’s document privileges when using those tools than in more traditional situations involving one-on-one conversations and written documents, he said.

Abbey B. Garber of Thompson & Knight LLP noted that the world has changed considerably in just the last few months as tax professionals adapt to the social distancing requirements brought on by the coronavirus pandemic.

“Video and audio conferences have exploded. . . . When people are on conferences, they take notes. Some of the conferences — such as this one — are recorded [and] third parties may be involved or may listen in,” Garber said. “You could have roommates that hear a call.”

Butler said many of these communication tools have recording capabilities that participants might not realize are being used.

Even though there are a host of new communication tools, traditional rules for things like the work product doctrine, attorney-client privilege, and the section 7525 tax practitioner privilege still apply, Butler said. A client can vitiate a privilege by sharing a written letter that contains legal advice as well as loop the wrong party into an email chain, he said.

Email chains and distribution lists involving in-house counsel can be particularly vulnerable to mingling business and legal advice, posing a risk to the protection of the latter or including parties not subject to the reach of attorney-client privilege, Butler said.

“I wonder how quickly before we see an inadvertent waiver case on Zoom-bombing,” Garber said.

So-called Zoom-bombing is hardly a far-fetched concern — a recent IRS teleconference concerning its whistleblower program was interrupted by a determined, uninvited guest whose profanity-laced tirades cut short two attempts to hold the meeting.

On the other hand, the IRS has embraced virtual conference technology as a way to continue participating in settlement days and help unrepresented Tax Court petitioners resolve their tax controversies.

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