Opinion
2824-20
04-24-2023
KIRK STEVENS & SHANNON STEVENS, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
Richard T. Morrison, Judge
On April 17, 2023, petitioners filed a Motion to Quash or Modify Subpoena (Doc. 122). In the motion, petitioners urged the Court to quash subpoenas issued by respondent to (1) Jeannette Witten, the managing partner of the law firm Hudson Martin Ferrante Street Witten & DeMaria; and (2) Akerman LLP, another law firm. Both law firms formerly represented petitioners.
We have previously recognized that petitioners waived attorney-client privilege regarding the 2014 transaction at issue in this case. (Order of April 6, 2023, Doc. 117). Therefore, the materials sought by the subpoena are in large part no longer protected by attorney-client privilege. However, at the hearing on April 19, 2023, which was held to address the enforceability of the subpoenas, Hudson Martin and Akerman explained that full compliance with the subpoenas is complicated by overlapping claims of legal interests and privilege by parties other than petitioners. They also explained that the responsive documents may have already been returned long ago to the petitioners, who are under their own obligation to produce documents to the IRS. Furthermore, the rapid onset of the trial date reduces the opportunity to adjudicate claims of privilege and resolve questions of scope of subpoena. We are also mindful that that the petitioners were already subject to an administrative examination. We recognize generally that documents from the files of a law firm are less likely to be relevant to the issues in this case than documents from the files of petitioners. In light of these considerations, we are inclined to narrow the scope of the subpoenas.
Each subpoena sought 9 categories of documents. We quash the subpoenas with respect to the following categories: 1, 2, 3, 5, 6, 9, 10, and 11. This leaves only categories 4, 7, and 8. We expect full compliance as to these categories, given that (1) these categories are relatively narrow in scope, (2) these categories involve documents that were either not privileged or for which privilege has been waived, and (3) the parties under subpoena have failed to submit a privilege log.
It is
ORDERED that petitioners' April 17, 2023 Motion to Quash or Modify Subpoena is granted insofar as it relates to categories 1, 2, 3, 5, 6, 9, 10, and 11. It is further
ORDERED that petitioners' April 17, 2023 Motion to Quash or Modify Subpoena is denied insofar as it relates to categories 4, 7, and 8. It is further
ORDERED that Hudson Martin PC shall, on or before May 3, 2023, produce at IRS Office of Chief Counsel, 60017th Street, Suite 300N, Denver, CO 80202-5402, for inspection and copying, and continuing from day to day thereafter for so long as reasonably necessary to examine and copy them, the documents that would be responsive to categories 1, 2, 3, 5, 6, 9, 10, and 11. It is further
ORDERED that Ackerman LLP shall, on or before May 3, 2023, produce at IRS Office of Chief Counsel, 60017th Street, Suite 300N, Denver, CO 80202-5402, for inspection and copying, and continuing from day to day thereafter for so long as reasonably necessary to examine and copy them, the documents that would be responsive to categories 1, 2, 3, 5, 6, 9, 10, and 11. It is further
ORDERED that in addition to regular service, the Clerk of the Court shall serve a copy of this Order on: (1) Records Custodian, Ackerman LLP, 801 Laurel Oak Drive, Suite 401, Naples, FL 34108, (2) Jeannette Witten, Hudson Martin PC, 490 Calle Principal, Monterey, CA 93940-2775, and (3) Records Custodian, Hudson Martin PC, 490 Calle Principal, Monterey, CA 93940-2775.