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Textron, the Work Product Doctrine, and the Impact of FIN 48

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On August 28, 2007, the U.S. District Court for the District of Rhode Island ruled in United States v. Textron Inc., C.A. No. 06-198T, 100 AFTR 2d 2007-5848, Doc 2007-20046, 2007 TNT 169-1 (D.R.I. 2007), that some of Textron’s internal tax accrual workpapers were protected from discovery under the work product doctrine because the papers were ‘‘prepared in anticipation of litigation’’ and the protection had not been waived by disclosure of the workpapers to auditors. Importantly, the workpapers at issue in Textron were prepared years before the Financial Accounting Standards Board issued Interpretation No. 48, ‘‘Accounting for Uncertainty in Income Taxes.’’ Assuming other courts agree with the Textron decision, it remains to be seen whether FIN 48 will affect the determination that tax accrual workpapers are prepared in anticipation of litigation. View full article (PDF).

This article first appeared in Tax Notes.