Kevin Kenworthy comments on the decision by the U.S Court of Appeals for the First Circuit that a company's tax accrual work papers, prepared with the assistance of in-house and external counsel, are protected work product. Although the Textron decision is viewed as a victory, there is some worry regarding the panel's decision to remand the case to the district court to determine whether Textron's work-product protection was waived by incorporation of its tax analysis into the work papers of its independent auditor, Ernst & Young. "If Ernst & Young's work papers reflected a sufficient amount of Textron's analysis in its own papers, the court says, and you assume that the Internal Revenue Service can compel Textron to turn over the auditor's work papers or subpoena the auditor for them, that would give Textron's work-product analysis to the IRS and that would be a waiver in the court's view," said Kenworthy. "From the court's analysis, it may be that Ernst & Young is a conduit to an adversary," he added. "We think that's the wrong analysis. The court held Textron's tax accrual analysis was protected and that protection wasn't waived by disclosing it to Ernst & Young even if Ernst & Young had kept the papers, which it didn't. The trial court now has to determine what is in Ernst & Young's papers."