Disclosure waives privilege.


Communications between taxpayers and attorneys are protected against forced disclosure by the doctrine of attorney-client privilege. The prohibition against forced disclosure has been extended to materials collected or prepared by an attorney in anticipation of litigation under the so-called work-product doctrine. Occasionally, protected documents are disclosed inadvertently. In such cases, the courts must decide if the disclosure waives the right of privilege. One view is that a document's disclosure automatically waives privilege. Another is that inadvertent disclosure win not waive privilege because the disclosure was not sanctioned by the holder of the privilege.

A third view exists. In National Helium Corp. v. United States (219 Ct. C1. 612, 1979), the court considered whether the taxpayer intended to waive the right of privilege and the precautions taken to prevent disclosure. More recently, in Carter v. Gibbs (909 F.2d 1450, 1990), the Federal Circuit Court appeared to adopt a rule that all disclosures waive privilege but stopped short of overruling National Helium.

In August 1996, IBM filed a motion for partial summary judgment -- maintaining that -- as a matter of law -- it was entitled to certain foreign tax credits. As part of the litigation, IBM turned over to the Internal Revenue Service a large number of documents as part of...

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