The best cases for white collar crime defense in Arizona are when the client utilizes counsel to remedy past business practices before the government conducts an investigation. This may call for an internal investigation or a review of financial records by a forensic expert. In some cases, it may very well be the client who acts as the whistle blower. In many cases, there may not be hint of litigation on the horizon, and in some cases may never be any litigation. One of the best outcomes of preemptive white collar crime defense is a quiet resolution of the client’s issues.
Most attorneys wouldn’t pay a second thought to the right to a protection of work product immunity, but it can be one of the best tools at the disposal of white collar crime defense. At the same time, many of the issues regarding work product immunity have come into question, as courts debate what exactly is and isn’t a work product.
First Circuit Rules Work Papers not a Work Production
The First Circuit addressed the issue of whether or not a document that is prepared for litigation but relates to a subject that might or might not cause litigation could be considered a work product. In its answer, the First Circuit rendered a decision that created a dangerous narrowing of the definition of a work product that can limit the efforts of white collar crime defense in Arizona.
The First Circuit determined that the previous court language “prepared in anticipation for litigation or trial” did not, in reference to anticipation, mean preparation for some purpose other than litigation, but rather the “work meant to be done for litigation but in advance of its institution.” The court clearly did not consider that a white collar crime defense attorney experienced in tax matters might have a different view. The court failed to recognize that an attorney’s role in advising a client is not solely to ready a matter for litigation, but to guide the client to the best possible recourse, whether that is a litigation or resolution.
Giving Undue Deference to IRS Policy of Restraint
The First Circuit did note that the “the IRS does not automatically request tax accrual work papers from taxpayers,” but only does so when the IRS has concluded that a company has engaged in “list transactions” that have been identified by the IRS as abusive tax shelters. The IRS, in fact, has a policy of restraint, only seeking tax accrual work papers in “unusual circumstances.” The IRS defines these papers as work audit papers that have been prepared by the taxpayer, an accountant or independent auditor, that relate to current tax liabilities. These papers have usually been reviewed by the client’s white collar crime defense team.
IRS examiners seek paperwork “only when factual data cannot be obtained from the taxpayer’s records or available 3rd parties, and then only as a collateral source for collected data.” The IRS has provided an exception to its policy of restraint with regard to abusive tax shelters. When a list transaction is not disclosed on a return, the IRS will ask for proof of the matter.
Consulting white collar crime defense in Arizona does not necessarily constitute a crime, but merely suggests the urgency to find a resolution. Whether or not tax documents under issue are considered a work product is currently under debate in the courts, but it is an area that provides the defense argumentative leverage.
About the Author
David Michael Cantor is an AV rated (the highest possible rating) lawyer and a Certified Criminal Law Specialist per the Arizona Board of Legal Specialization. For more information about an Arizona white collar crime defense, visit our site.