U.S. District Court Rules Against Sealing Tax Advice Email, Limits Tax Practitioner Privilege

The U.S. District Court for the Southern District of California denied the defendants’ motion to seal an exhibit containing tax advice, holding that the tax practitioner privilege did not apply to communications regarding tax return preparation. Taxpayers, who were defendants in a civil case, sought to seal an email from their tax advisor analyzing shareholder loan information in tax returns in preparation for filing 2023 returns. The court held that while personalized tax advice may be sealable under IRC §7525 as privileged tax advice comparable to attorney-client privilege for taxpayer communications with tax practitioners, the privilege does not extend to ...