Kevin Kenworthy comments on U.S. v. Textron, in which the 1st Circuit ruled that Textron’s tax accrual workpapers were not protected by attorney work-product privilege and had to be delivered to the IRS. "In my view, the [2002 IRS] policy change was really designed to uncover participation in tax shelters and to discourage those companies from engaging in new ones," says Kenworthy. "The theory being that if a company knew it was liable to disclose its workpapers if it engaged in a tax shelter, it would be less likely to engage in the transaction in the first place."

"One consequence of this case might be that the IRS decides to revisit that policy, or they might be pressured to do so by Congress," says Kenworthy. "The IRS has a big job, they don’t have limitless resources, and Congress could well ask, ‘Why aren’t you using this tool to uncover tax avoidance?’"