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Government Opposes Rehearing in IRS John Doe Summons Case

JUL. 20, 2020

Taylor Lohmeyer Law Firm PLLC v. United States

DATED JUL. 20, 2020
DOCUMENT ATTRIBUTES

Taylor Lohmeyer Law Firm PLLC v. United States

TAYLOR LOHMEYER LAW FIRM P.L.L.C.,
Petitioner-Appellant
v.
UNITED STATES OF AMERICA,
Respondent-Appellee

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

ON APPEAL FROM THE ORDER OF THE UNITED STATES
DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS

RESPONSE TO PETITION FOR REHEARING EN BANC

RICHARD E. ZUCKERMAN
Principal Deputy Assistant Attorney General

T. JOSHUA WU
Deputy Assistant Attorney General

FRANCESCA UGOLINI (202) 514-3361
MICHAEL J. HAUNGS (202) 514-4343
DOUGLAS C. RENNIE(202) 305-7546
Attorneys
Tax Division
Department of Justice
Post Office Box 502
Washington, D.C. 20044


TABLE OF CONTENTS

Table of contents

Table of authorities

Glossary

Introduction

Discussion

The panel correctly applied the controlling law and rejected the Firm's unsupported blanket privilege claim

A. The identity exception does not apply without a showing that identity is inextricably intertwined with privileged communications

B. The “last link” doctrine and “bag man cases” are obsolete

C. The panel did not create any new rule regarding the identity exception

D. A generic “motive” for hiring an attorney is not privileged

E. BDO Seidman is on point

F. Policy concerns support affirmance

Conclusion

Certificate of service

Certificate of compliance

TABLE OF AUTHORITIES

Cases:

Baird v. Koerner, 279 F.2d 623 (9th Cir. 1960)

Doe v. KPMG, L.L.P., 325 F. Supp. 2d 746 (N.D. Tex. 2004)

Doe v. United States (“In re Shargel”), 742 F.2d 61 (2d Cir. 1984)

EEOC v. BDO USA, L.L.P., 876 F.3d 690 (5th Cir. 2017)

Fisher v. United States, 425 U.S. 391 (1976)

Gonzalez v. Southern Pac. Transp. Co., 773 F.2d 637 (5th Cir. 1985)

In re Grand Jury Proceeding (“Cherney”), 898 F.2d 565 (7th Cir. 1990)

In re Grand Jury Proceedings (“Pavlick”), 680 F.2d 1026 (5th Cir. 1982) (en banc)

In re Grand Jury Subpoena (“Reyes-Requena I”), 913 F.2d 1118 (5th Cir. 1990)

In re Grand Jury Subpoena (“Reyes-Requena II”), 926 F.2d 1423 (5th Cir. 1991)

Nguyen v. Excel Corp., 197 F.3d 200 (5th Cir. 1999)

NLRB v. Harvey, 349 F.2d 900 (4th Cir. 1965)

Tillotson v. Boughner, 350 F.2d 663 (7th Cir. 1965)

United States v. Aronson, 610 F. Supp. 217 (S.D. Fla. 1985), aff'd, 781 F.2d 1580 (11th Cir. 1986)

United States v. BDO Seidman, 337 F.3d 802 (7th Cir. 2003)

United States v. Blackman, 72 F.3d 1418 (9th Cir. 1995)

United States v. Clarke, 573 U.S. 248 (2014)

United States v. El Paso Co., 682 F.2d 530 (5th Cir. 1982)

United States v. Hirsch, 803 F.2d 493 (9th Cir. 1986)

United States v. Jones, 517 F.2d 666 (5th Cir. 1975)

United States v. Liebman, 742 F.2d 807 (3d Cir. 1984)

United States v. Under Seal, 204 F.3d 516 (4th Cir. 2000)

Vingelli v. DEA, 992 F.2d 449 (2d Cir. 1993)

Statutes:

Internal Revenue Code (26 U.S.C):

§ 6201(a)

§ 7525

§ 7609(f)(2)

Miscellaneous:

5th Cir. I.O.P. 35

Fed. R. App. P. 35(a)

Michael I. Saltzman & Leslie Book, IRS Practice & Procedure ¶ 13.05[2] (Feb. 2020)

3 Jack B. Weinstein et al., Weinstein's Federal Evidence § 503.14[5][b] (2d ed. 2019)

24 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure Evidence § 5478 (2019)

GLOSSARY

Acronym

Definition

Amici/Amicus

The Association and/or the College

Association

National Association of Criminal Defense Lawyers

Ass'n

The Association's amicus curiae brief

Coll.

The College's amicus curaie brief

College

America College of Tax Counsel

Does

U.S. clients of the Firm who participated in transactions described in the summons

Firm

Appellant Taylor Lohmeyer Law Firm P.L.L.C.

Firm

The Firm's opening brief

Gov't

The Government's answering brief

I.R.C.

Internal Revenue Code

IRS

Internal Revenue Service

Op.

The panel's opinion

Pet.

The Firm's petition for rehearing en banc

ROA

Documents contained in the record on appeal, as numbered by the Clerk of the Court


INTRODUCTION

The issue in this case is whether a law firm can use the attorney-client privilege to withhold client identities without making any showing that the disclosure of the identities would necessarily reveal confidential communications made for the purpose of obtaining or conveying legal advice. The District Court and a three-judge panel of this Court correctly held that the Firm could not do so.

The IRS issued the “John Doe” summons1 in this case to the Firm after determining that one of its clients (Taxpayer-1) had used offshore structures set up with the Firm's assistance to hide $5 million in unreported income. (Gov't 7-11.) The summons sought information concerning other Firm clients (the Does) who used similar Firm services.2 (Gov't 15-16.) Because the Government expected that some responsive information would be privileged, it requested information equivalent to a privilege log for any withheld materials. (ROA.98-99, 265-66.)

In the subsequent action to enforce the summons, the Firm asserted a blanket claim that all documents responsive to the summons (over 32,000 pages) were protected by the attorney-client privilege. (ROA.21-22, 159-60.) It was apparent, however, that many of those documents reflected non-legal, business services. (Gov't 17, 19, 59-60; ROA.145, 265.)

A panel of this Court correctly rejected the Firm's arguments. 957 F.3d 505. The panel explained that client identities are generally not protected by the attorney-client privilege, but a “'limited and rarely available'” exception exists which applies on a “'case-by-case basis.'” (Op. 7 (quoting United States v. Jones, 517 F.2d 666, 671 (5th Cir. 1975).) It also explained that the exception “does not expand the scope of the privilege.” (Id.)

Because the Firm invoked the privilege, it was its burden to show that the exception applied. (See Op. 6.) The panel, however, held that the cases the Firm relied on were distinguishable. (Op. 9-10 (discussing In re Grand Jury Subpoena (“Reyes-Requena II”), 926 F.2d 1423, 1425, 1428, 1431 (5th Cir. 1991), and United States v. Liebman, 742 F.2d 807, 808-10 (3d Cir. 1984).) The panel further noted that, despite some differences, the present case was more akin to United States v. BDO Seidman, 337 F.3d 802, 805-06, 812-13 (7th Cir. 2003), where the Seventh Circuit rejected a similar privilege claim. (Op. 11-13.)

The Firm now petitions for rehearing en banc, contending that the panel's decision is inconsistent with the law of this Court and creates a new requirement for invoking the attorney-client privilege. These arguments hold no water. The panel correctly applied the controlling law in its fact-dependent decision and much of the caselaw relied upon by the Firm is obsolete. Nor did the panel fashion any new rule — it merely distinguished an out-of-circuit case on its facts. Its decision was also supported by analogous authority and policy considerations. Rehearing en banc is not warranted.

DISCUSSION

The panel correctly applied the controlling law and rejected the Firm's unsupported blanket privilege claim

“Alleged errors . . . in the application of correct precedent to the facts of the case are generally” not matters for rehearing en banc. 5th Cir. I.O.P. 35 (capitalization omitted); accord Gonzalez v. Southern Pac. Transp. Co., 773 F.2d 637, 641 (5th Cir. 1985). Rather, “[a] petition for rehearing en banc is an extraordinary procedure that is intended to bring to the attention of the entire court an error of exceptional public importance or an opinion that directly conflicts with prior Supreme Court, Fifth Circuit, or state law precedent.” 5th Cir. I.O.P. 35 (capitalization omitted); accord Fed. R. App. P. 35(a). That standard is not satisfied here.

A. The identity exception does not apply without a showing that identity is inextricably intertwined with privileged communications

The Firm claims that the attorney-client privilege protects a client's identity where an attorney-client relationship exists and the Government seeks the identity “to investigate suspected wrongdoing.” (Pet. 3.) This is not the law.

The attorney-client privilege “protects only those disclosures necessary to obtain informed legal advice which might not have been made absent the privilege.” Fisher v. United States, 425 U.S. 391, 403 (1976). The party invoking the attorney-client privilege bears the burden of establishing the following “ 'highly fact-specific'” elements: “'(1) that he made a confidential communication; (2) to a lawyer or his subordinate; (3) for the primary purpose of securing either a legal opinion or legal services, or assistance in some legal proceeding.'” EEOC v. BDO USA, L.L.P., 876 F.3d 690, 695 (5th Cir. 2017) (citations omitted).

This Court has repeatedly held that “blanket” privilege claims are “inadequate” and that the “privilege must be specifically asserted with respect to particular documents.” United States v. El Paso Co., 682 F.2d 530, 539, 541 (5th Cir. 1982); (Gov't 38-41.) Courts should also proceed with caution when applying the privilege “in the context of IRS investigations given the 'congressional policy choice in favor of disclosure of all information relevant to a legitimate IRS inquiry.'” EEOC, 876 F.3d at 696.

“As a general rule, client identity and fee arrangements are not protected as privileged.” Reyes-Requena II, 926 F.2d at 1431. “This is because a client's identity is not generally “the kind[ ] of disclosure[ ] that would not have been made absent the privilege and [its] disclosure does not incapacitate the attorney from rendering legal advice.” Vingelli v. DEA, 992 F.2d 449, 452 (2d Cir. 1993). Nonetheless, this Court has recognized a narrow exception to this generally-recognized rule.

The exception applies “only where revelation of such information would disclose other privileged communications such as the confidential motive for retention.” In re Grand Jury Subpoena (“Reyes-Requena I”), 913 F.2d 1118, 1125 (5th Cir. 1990) (emphasis added). This can occur where a client's identity is “connected inextricably with a privileged communication — the confidential purpose for which he sought legal advice.” Reyes-Requena II, 926 F.2d at 1431.

In Reyes-Requena II, the district court found that sealed filings demonstrated that the client's identity was privileged because the client communicated identity in a manner that was simultaneous with (and inextricably intertwined with) a confidential communication made for the purpose of obtaining legal advice. 926 F.2d at 1428, 1432-33. In the absence of such a showing, however, the privilege would not have applied. See United States v. Hirsch, 803 F.2d 493, 498-99 (9th Cir. 1986), corrected on other grounds, 817 F.2d 64 (9th Cir. 1987). Reviewing the district court's finding for abuse of discretion, this Court affirmed.3 See Reyes-Requena II, 926 F.2d at 1431-33.

Thus, the panel correctly explained that the narrow exception “does not expand the scope of the privilege” and “does not apply 'independent of the privileged communications between an attorney and his client.'” (Op. 7 (quoting Reyes-Requena I, 913 F.2d at 1124).) The panel also correctly emphasized that both the application of the privilege generally, and the identity exception specifically, are highly fact-dependent issues that must be considered on a case-by-case basis. (Op. 5-7.) It thus correctly stated the law of this Circuit, and its application of that law to the particular facts of this case is not a valid basis for rehearing en banc. 5th Cir. I.O.P. 35.

B. The “last link” doctrine and “bag man cases” are obsolete

The Firm relies heavily on Jones and a series of cases decided in the 1960s, claiming that they stand for the proposition that the privilege protects identities even if disclosure would not reveal privileged advice. (See Pet. 7-8, 13-14 & n.2; see also Coll. 9-10 & n.3.) In essence, the Firm asserts that the Does' identities should be privileged because an attorney-client relationship exists and the Government “wants to investigate [the Does] for potential tax deficiencies.” (Pet. 3, 8.) Although it does not explicitly admit it, the Firm is essentially attempting to revive (and expand) the discredited “last link” doctrine.

Jones held that client identities were privileged where they constituted “links in an existing chain of inculpatory events or transactions.” 517 F.2d at 674-75. In reaching that conclusion, Jones, 517 F.2d at 671, relied heavily on Baird v. Koerner, 279 F.2d 623 (9th Cir. 1960), and Tillotson v. Boughner, 350 F.2d 663 (7th Cir. 1965), which held that the privilege protected the identity of a client who hired an attorney to anonymously pay delinquent taxes.

Baird, Tillotson, and their progeny are known as “the bag man cases.” 24 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure Evidence § 5478 (2019). They have been heavily criticized as it is “difficult to see how granting the privilege” in those cases could be justified given that a legal education is not “the proper training for a delivery boy.” Id. Otherwise, under the logic of these cases, clients could “rent[ ] the privilege” by hiring lawyers to perform menial tasks. Id.; accord United States v. Under Seal, 204 F.3d 516, 522 n.5 (4th Cir. 2000) (quoting Wright & Miller, supra).

Moreover, such cases applied the privilege “to gain a positive advantage for wrongdoers.” 3 Jack B. Weinstein et al., Weinstein's Federal Evidence § 503.14[5][b] (2d ed. 2019). Thus, in more recent decisions, courts have cautioned against the exception “'becom[ing] an immunity for corrupt or criminal acts.'” Under Seal, 204 F.3d at 523 (quoting Doe v. United States (“In re Shargel”), 742 F.2d 61, 64 (2d Cir. 1984)). “Such a shield would create unnecessary but considerable temptations to use lawyers as conduits of information or of commodities necessary to criminal schemes or as launderers of money.” Id. (quoting Shargel).

Jones's continuing viability is limited. Sitting en banc, this Court refused to apply Jones, indicating that the “last link” doctrine should be confined to the “peculiar facts” of Jones, which involved a “broad attempt” by the Government to canvass “a generous portion” of the lower Rio Grande Valley area criminal bar for information detrimental to certain clients. In re Grand Jury Proceedings (“Pavlick”), 680 F.2d 1026, 1027 (5th Cir. 1982) (en banc). More recently, in Reyes-Requena I, this Court rejected the argument that Jones should be read as “fashion[ing] a 'last link' or 'affirmative link' attorney-client privilege independent of the privileged communications between an attorney and his client.” 913 F.2d at 1124 (emphasis added). Other circuits have also backed away from the “bag man cases.” United States v. Blackman, 72 F.3d 1418, 1424 (9th Cir. 1995) (Baird's analysis “has since been discredited within our circuit”); BDO Seidman, 337 F.3d at 812 (distinguishing Tillotson and In re Grand Jury Proceeding (“Cherney”), 898 F.2d 565, 568 (7th Cir. 1990)); Under Seal, 204 F.3d at 520, 522 n.5 (clarifying Fourth Circuit law after NLRB v. Harvey, 349 F.2d 900 (4th Cir. 1965), rejecting Baird and Tillotson, and citing Wright & Miller, supra).

Thus, as the panel recognized (Op. 7), Jones is good law to the extent that it stands for the proposition that “the attorney-client privilege shields the identity of a client or fee information only where revelation of such information would disclose other privileged communications such as the confidential motive for retention.” Reyes-Requena I, 913 F.2d at 1125. But the Firm cannot rely on Jones and “the bag man cases” to revive the discredited “last link” doctrine and assert the attorney-client privilege over identities with no showing that disclosure would also reveal a confidential communication of legal advice. Any “conflict” between the panel's opinion and “the bag man cases” resulted from Pavlick, Reyes-Requena I, Reyes-Requena II, and the weight of other authority — not the panel's decision in this case.

C. The panel did not create any new rule regarding the identity exception

The Firm repeatedly claims that the panel created a new requirement that Government “must know the substance or content of the specific legal advice” for the privilege to apply to a client's identity. (Pet. 3.) The panel did no such thing.

What the panel did do is factually distinguish the Third Circuit's decision in Liebman. Prior to the panel's decision, Liebman was the primary authority relied upon by the Firm, which bore the burden of establishing its privilege claim. (See Firm 7 (arguing that Liebman is the “most analogous” case).) In Liebman, 742 F.2d at 809, the court concluded that client identities were privileged where the IRS had sought the names of a law firm's clients who had been advised that specific fees were deductible because the disclosure would have revealed “the subject matter” and “content” of the attorney-client communication. Until now, the lynchpin of the Firm's argument on appeal was that Liebman is analogous because the Government's declarations here showed that it already knew the substance of the Firm's “legal advice” to the Does. (Firm 8, 17; accord Coll. 11-12.)

The panel rejected the Firm's attempt to shoehorn the facts of this case into the Liebman analysis, explaining that the Government's declarations “did not state that the Government knows the substance of the legal advice the Firm provided the Does.” (Op. 10; see also Gov. 55 n.13.) Notably, the panel was not the first court to factually distinguish Liebman in this manner. United States v. Aronson, 610 F. Supp. 217, 222 n.4 (S.D. Fla. 1985) (Liebman did not apply where “IRS summons at bar does not specify the type of legal advice provided [to the unnamed client], but rather seeks information about the corporate entities in which [the client] possesse[d] an interest”), aff'd, 781 F.2d 1580 (11th Cir. 1986).

Thus, the panel correctly recognized that Liebman was factually distinguishable in response to the Firm's arguments and so held. (Cf. Gov't 49-56.) It did not create any new requirement and its holding is consistent with the law of this Circuit. See 5th Cir. I.O.P. 35.

D. A generic “motive” for hiring an attorney is not privileged

The Firm argues that a client's identity is privileged where its disclosure would also reveal the client's “motive” for consulting the attorney. (Pet. 9-11.) It is true that a “confidential motive for retention” can be a basis for the exception to apply where it is part of a “privileged communication.” Reyes-Requena I, 913 F.2d at 1125 (identity is privileged where disclosure would reveal “privileged communications such as the confidential motive for retention.” (emphasis added)). A generic and obvious motive, however, does not satisfy this requirement.

The Firm never explicitly states what the Does' “motive” was here. (See Pet. 9-11.) Rather, it incorrectly claims that the Government does not dispute that it knows the Does' “motive for hiring” the Firm. (Pet. 9.) In fact, this has been heavily disputed throughout these proceedings: as the Government explained, although the Government knows what the Firm discussed with Taxpayer-1 based on its investigation, it does not follow that the Government therefore knows the motivations of, and advice sought by, other clients who participated in a variety of transactions over a 20-year period. (Gov't 54-55 & n.13.) The Government further explained that it “does not know that the Does engaged in the same fraudulent conduct as Taxpayer-1,” as participating in foreign transactions is not inherently improper or incriminating. (Gov. 53-54.)

The Firm's reliance (Pet. 9 & n.1) on one of its partner's publicly-filed affidavits is also unavailing; a motive that has been intentionally disclosed is “no longer confidential” and, therefore, is not privileged. Under Seal, 204 F.3d at 521. Regardless, as the panel noted (Op. 11), the partner voluntarily proclaimed that the Does were not in the same situation as Taxpayer-1 because they had “distinguishable” circumstances. Nor could the Firm satisfy its burden by offering (Pet. 9) to submit all 32,000 responsive documents to the District Court for an in camera privilege review.

The Firm also argues that the mere “exist[ence of] an attorney-client relationship” (Pet. 3) is sufficient for identity to become privileged. This is plainly incorrect as the “privilege does not permit an attorney to conduct his client's business affairs in secret.” Hirsch, 803 F.2d at 496. The argument also appears to improperly conflate the privilege with the broader ethical duty to maintain client confidences and secrets. Cf. Harvey, 349 F.2d at 906; Blackman, 72 F.3d at 1424. Regardless, the “general nature” of an attorney's services “is not protected by the privilege.” Nguyen v. Excel Corp., 197 F.3d 200, 206 (5th Cir. 1999); see also Shargel, 742 F.2d at 64 n.5. Thus, to the extent that the Firm relies on a generic desire to reduce one's tax liability (see Pet. 8; Ass'n 8 n.18; Coll. 14.) — a desire presumably shared by every taxpayer in the world — it is not a confidential motive for retention. See Doe v. KPMG, L.L.P., 325 F. Supp. 2d 746, 753 (N.D. Tex. 2004) (“virtually any taxpayer who seeks tax advice from an accounting firm is looking for ways to minimize his taxes”); Wright & Miller, supra (generic “tax advice” can be provided by non-lawyers including accountants and “supermarket tax preparers.”). If the privilege attached to a motive at such a high level of generality, the identity exception would not be an exception at all — it would be a bright-line rule.

Indeed, contrary to Amicus's claim (Coll. 12 n.4), the record in this case showed that much of the work performed by the Firm was non-legal — arranging real estate transactions, buying artwork, structuring loans, identifying strawmen to serve as the nominees, arranging fund and asset transfers, relaying investment suggestions, and having corporate documents filed in foreign jurisdictions. (See Gov't 59-60.) Allowing the Firm to cast a blanket privilege over such work would incentivize the use of lawyers by those who can afford them to perform routine business and tax services.

E. BDO Seidman is on point

Contrary to the Firm's argument (Pet. 14-16), the panel correctly held that the present case was most analogous to BDO Seidman, 337 F.3d at 811-12, in which the Seventh Circuit determined that the identities of an accounting firm's clients were not privileged. (Op. 11-13.) The panel acknowledged that BDO Seidman “does differ in some respects from this case” — there, the clients intervened to assert the privilege, the Government was investigating the accounting firm's compliance with the law, and the statutory taxpayer-tax practitioner privilege, I.R.C. § 7525, was at issue rather than the attorney-client privilege. (Op. 12.) Nevertheless, because the statutory privilege was modeled on the attorney-client privilege, the Seventh Circuit analyzed the same legal standards at issue in this case. 337 F.3d at 810-12.

In BDO Seidman, the clients argued that their identities were privileged because the IRS summonses would reveal their motivation for seeking tax advice. 337 F.3d at 812. The Seventh Circuit rejected that argument, concluding that they failed to establish “that a confidential communication will be disclosed if their identities are revealed in response to the summonses.” Id. It acknowledged that disclosure of their identities would disclose that they “participated in one of the 20 types of tax shelters described in [the] summons.” Id. But, it was “less than clear . . . what motive, or other confidential communication of tax advice, can be inferred from that information alone.”4 Id.

As the panel concluded, the “same is true here” because “disclosure of the Does' identities would inform the IRS that the Does participated in at least one of the numerous transactions described in the John Doe summons issued to the Firm, but 'it is less than clear as to what motive, or other confidential communication of legal advice, can be inferred from that information alone.'” (Op. 12-13 (cleaned up).)

BDO Seidman is one of many instances where, consistent with the panel's opinion, a court held that client identities or fee information were not privileged. See, e.g., Shargel, 742 F.2d at 64 & n.4 (stating that the “identification of individuals as clients [of a lawyer] neither discloses nor implies a confidential communication” and a consultation with a criminal law specialist does not imply any confidential communication about criminal activity); Under Seal, 204 F.3d at 521; (Gov't 47-48 & n.10.)

The panel properly relied on BDO Seidman as the most analogous case, and it created no conflict with another Circuit in doing so.

F. Policy concerns support affirmance

Offshore tax evasion costs the Treasury billions of dollars in tax revenue every year. (Gov't Br. 5-7.) The IRS has a duty to make inquiries and determine whether taxes are being paid. United States v. Clarke, 573 U.S. 248, 249-50 (2014) (quoting I.R.C. § 6201(a)). Robust enforcement is vital to the efficacy of the federal tax system, which relies on voluntary compliance, in order to preclude dishonest persons from shifting heavier burdens to honest taxpayers. (Gov't 25-26); BDO Seidman, 337 F.3d at 810.

The Government does not dispute that some responsive documents may be privileged, which is why it requested a privilege log. But the privilege does not, and cannot, wholly preclude the Government from issuing a John Doe summons to an attorney. (Cf. Ass'n 9.) Because the privilege “impedes the quest for truth, . . . it must 'be strictly confined within the narrowest possible limits[.]'” Shargel, 742 F.2d at 62. It should not be applied in a manner that interferes with the administration of justice and incentivizes the use of lawyers to carry out illegal schemes. Under Seal, 204 F.3d at 523; Shargel, 742 F.2d at 64.

The panel's unanimous, fact-specific opinion is consistent with the law of this Circuit. Rehearing en banc is unwarranted.

CONCLUSION

The petition for rehearing should be denied.

Respectfully submitted,

RICHARD E. ZUCKERMAN
Principal Deputy Assistant Attorney General

T. JOSHUA WU
Deputy Assistant Attorney General

FRANCESCA UGOLINI (202) 514-3361
MICHAEL J. HAUNGS (202) 514-4343
DOUGLAS C. RENNIE (202) 305-7546
Attorneys
Tax Division
Department of Justice
Post Office Box 502
Washington, D.C. 20044

JULY 2020

FOOTNOTES

1A “John Doe” summons must initially be approved by senior officials at the IRS and Department of Justice, Tax Division. See Michael I. Saltzman & Leslie Book, IRS Practice & Procedure ¶ 13.05[2] (Feb. 2020). Then, the Government must obtain district court approval in an ex parte proceeding by demonstrating that it has a “reasonable basis” for the inquiry. I.R.C. § 7609(f)(2).

2Contrary to the Firm's suggestion (Pet. 1), the summons sought information about U.S. clients based on the services they used, not the advice they received (ROA.96-98). The Firm and Amici additionally mischaracterize the record in ways too numerous to address here. We refer the Court to our answering brief for a complete statement of the facts. (Gov't 4-21.)

3Amicus “represent[s]” that it is aware of the content of the sealed filings in Reyes-Requena II and that they did not contain legal advice. (Ass'n 7 n.15.) We cannot respond to the substance of this assertion as we lack access to those sealed filings. Regardless, it is the holdings of the Reyes-Requena opinions that control, not an amicus's unverifiable interpretation of sealed filings.

4The court also noted that the clients could not establish an expectation of confidentiality because their participation in tax shelters was subject to disclosure under federal law. See id. But contrary to Amici's suggestion (Ass'n 4-5; Coll. 13-14), this was not the sole basis for the court's decision, nor the analysis upon which the panel here relied.

END FOOTNOTES

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