Professor Ventry Comments on Tax Ruling for Tax Notes

Professor Dennis J. Ventry, Jr. commented for Tax Notes on a U.S. Court of Appeals decision holding that the government could not compel an accounting firm to disclose a taxpayer-client's workpapers because the documents were protected under the work product doctrine and no waiver occurred when the taxpayer shared the documents with its outside auditor.

Professor Ventry said the court's reasoning on the waiver issue was unpersuasive, stating that the materials did not deserve work product protection "because its purpose was to assist in fulfilling financial disclosure requirements rather than in gearing up for litigation." 

Also, the court failed to take into account that "as increasing numbers of taxpayers sue their tax advisers for malpractice ... it will become less and less likely that auditors will 'maintain confidentiality,' and more and more likely that outside auditors look like adversaries or potential adversaries," Professor Ventry said. "At some point, courts will have to incorporate this reality into their work product analyses; currently, they ignore it altogether."

In addition, the Circuit Court misconstrued the distinction between a document's function and its content, and erroneously stated that the government asked it to "look solely to a document's function divorced from its contents," Professor Ventry stated.

Professor Ventry is an expert in tax policy and has written widely in the field. His research interests include family taxation, tax expenditure analysis, legal ethics and professional standards, tax and legal history, tax compliance and administration, and public finance.