the introduction of evidence by respondents tending to show that each specific question which Schmidt refused to answer involves an attempt by petitioners to procure information which has been communicated in confidence between taxpayers, attorney and accountant for the purpose of obtaining legal advice.
In a federal income tax investigation in which a Special Agent of the Internal Revenue Service seeks to enforce a summons in federal court, the question of privilege is a question of federal law. United States v. Finley, 5 Cir. 1970, 434 F.2d 596; Colton v. United States, 2 Cir. 1962, 306 F.2d 633; cf. United States v. Jaskiewicz, E.D.Pa.1968, 278 F. Supp. 525; United States v. Bowman, M.D.Pa.1964, 236 F. Supp. 548. There is no accountant-client privilege in the federal system. United States v. Bowman, supra. However, there are circumstances in which an accountant may be brought within the ambit of the attorney-client privilege. United States v. Judson, 9 Cir. 1963, 322 F.2d 460; United States v. Kovel, 2 Cir. 1961, 296 F.2d 918; United States v. Cote, D.Minn.1971, 326 F. Supp. 444; United States v. Jacobs, C.D.Cal.1971, 322 F. Supp. 1299; Bauer v. Orser, D.N.D.1966, 258 F. Supp. 338. As stated in an opinion written by Judge Friendly in United States v. Kovel, supra, what is vital to the assertion of the attorney-client privilege by an accountant is that the information or the records sought to be withheld as privileged contain confidential material transmitted by or to the client for the purpose of obtaining legal advice from the attorney; if what is sought is only accounting services or the advice of the accountant, or if what is transmitted is not material intended to be confidential, no privilege exists. The person seeking to preclude disclosure has the burden of producing evidence sufficient to show the existence of a relationship giving rise to the privilege. In Re Bonanno, 2 Cir. 1965, 344 F.2d 830; Bouschor v. United States, 8 Cir. 1963, 316 F.2d 451; United States v. Kovel, supra; Honeywell, Inc. v. Piper Aircraft Corporation, M.D.Pa.1970, 50 F.R.D. 117. The burden of production is not satisfied by mere conclusory or ipse dixit assertions, for any such rule would foreclose meaningful inquiry into the existence of the privilege. In Re Bonanno, supra. Furthermore, a blanket refusal to testify is unjustified; rather, the privilege must be established with respect to each question sought to be avoided. United States v. Roundtree, 5 Cir. 1969, 420 F.2d 845; Colton v. United States, supra.
Applying the enumerated criteria to the facts of the instant case, this court cannot say with certainty that respondents have met the burden imposed upon them. They have established that the role of the accountant was to facilitate the rendering of legal services. However, they have failed to introduce evidence tending to show that the specific information sought to be withheld is "confidential." Instead, there has merely been a general showing of confidentiality. Rather than attempt to reach a decision on the existing state of the record, it is the opinion of this court that an equitable reconciliation of the competing interests involved is most likely to result if respondents are given an opportunity to submit to the court, for in camera inspection, affidavits containing: (1) the facts which would be related in response to each of petitioners' questions but for the existence of the asserted privilege; (2) the factual basis upon which respondents predicate their contention that the information sought to be withheld is confidential. Any such affidavits may address themselves to both of the matters enumerated or to either of them, individually. There is ample precedent for this procedure. In Re Natta, 3 Cir. 1969, 410 F.2d 187 n. 4; Natta v. Hogan, 10 Cir. 1968, 392 F.2d 686; Groh v. Decker, 72-1 U.S. Tax Cas. (CCH) P9410, W.D.Mich., 1971; Deering Milliken Research Corporation v. Tex-Elastic Corporation, D.S.C.1970, 320 F. Supp. 806; Continental Coatings Corporation v. Metco, Inc., N.D.Ill.1970, 50 F.R.D. 382; Philadelphia Housing Authority v. American Radiator & Standard Sanitary Corporation, E.D.Pa.1969, 294 F. Supp. 1148; cf. Garner v. Wolfinbarger, 5 Cir. 1970, 430 F.2d 1093; Natta v. Zletz, 7 Cir. 1969, 418 F.2d 633. Accordingly, respondents will be given a reasonable time within which to submit affidavits.
In accordance with memorandum this day filed, it is ORDERED that a decision regarding the right of respondent, J. Donald Schmidt, to assert the attorney-client privilege be held in abeyance in order to afford respondents, in their discretion, a reasonable opportunity to submit to the court, for in camera inspection, affidavits with respect to each question which respondent, J. Donald Schmidt, has refused to answer, viz., 7. C. through 11, 14 through 16. D., 19, 20.
It is FURTHER ORDERED that any affidavits submitted contain the following:
1. The facts which would be related in response to petitioners' question but for the existence of the asserted privilege;
2. The factual basis upon which respondents predicate their contention that the specific information sought to be withheld involves confidential communications made for the purpose of facilitating the provision of legal services.
It is FURTHER ORDERED that any such affidavits be submitted to the court on or before May 5, 1972.
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