Taxpayers seeking legal advice on tax issues must consider the potential loss of attorney-client privilege when they turn over written advice to accountants, tax return preparers and others. In Sanmina Corp., decided by the United States Court of Appeals for the Ninth Circuit in August 2020, the taxpayer waived its attorney-client privilege when it turned over internal legal tax advice to an outside law firm performing non-legal valuation services. The IRS further asserted that the taxpayer waived the attorney work-product privilege on this advice when it turned over the law firm valuation report to the IRS because the internal advice was cited in a footnote. Mark Leeds and Minju Kim, of Mayer Brown’s New York office, analyze this decision to help taxpayers navigate when and how legal tax advice can be disclosed to others and still retain privilege against the IRS.

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