First Circuit Vacates Textron Workpaper Privilege Decision


The First Circuit has vacated its January decision in the Textron case, and a full panel of First Circuit judges will rehear the case in June.

 

The January decision (No. 07-2631 (1st Cir. 1/21/09)) had held that the work-product privilege could operate to prevent the disclosure to the IRS of workpapers prepared in anticipation of an IRS examination. At that time, the appeals court remanded the case to a lower court to decide if Textron had waived that privilege in this case. (Click here to read a discussion of the January opinion.)

 

The January decision did not squarely address what test should be applied for deciding whether workpapers were shielded by the privilege. The dissent in that case had argued that workpapers created in the ordinary course of business and not just in anticipation of litigation could not be privileged and that the January decision ran counter to prior First Circuit precedent. The June rehearing will give the First Circuit a chance to decide those issues. Because the earlier decision has been vacated, both the holding on the work-product privilege and the remand on the waiver issue are without effect.

 

SPONSORED REPORT

2018 financial reporting survey: Challenges and trends

Learn the top reporting challenges that emerged in a survey of more than 800 finance, accounting, and compliance professionals across the world, and compare them with your organization's obstacles.

PODCAST

How the skill set for today’s CFO is changing

Scott Simmons, a search expert for large-company CFOs, gives advice for the next generation of finance leaders and more, including which universities are regularly producing future CEOs and CFOs.