Monday, May 17, 2010

Kagan Filed Brief on Behalf of IRS in Textron Case

Supreme Court nominee Elena Kagan has been in the headlines since President Obama announced her nomination. Since she does not have a judicial record, reporters and bloggers are desperate to learn more about her tax and financial views. According to WebCPA, while servicing as Solicitor General Kagan filed a brief on behalf of the IRS.

“When the case was originally considered last winter, the First Circuit held the documents should not be produced because they were protected by the work product doctrine, which is in both case law and the Federal Rules of Civil Procedure. The doctrine provides that documents prepared in anticipation of litigation do not need to be produced to an adversary,” she said. “The policy is that the adversary should not have the opportunity to build a case by ‘taking a peek’ at the other side’s thoughts and strategies.”

The government wants to look at the work papers, naturally, because they document what the company itself considers its questionable tax positions.

In the government’s brief filed in April urging the Supreme Court not to hear the case, Solicitor General (and now Supreme Court nominee) Elena Kagan stated, “By characterizing essentially any interaction between a taxpayer and the IRS as ‘litigation,’ petitioner [Textron Inc.] and its amici [friends of the court] fail to appreciate the dynamics of our self-assessing tax system. In an administrative tax proceeding, the ‘parties are not adversaries, but rather two elements of the tax regulatory regime, with one party reporting its self-assessed tax liability and the other party attempting to verify that self-assessment.’”

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