Steven Dimengo


The broad summoning power of the Internal Revenue Service [IRS] which enables it to examine any documents related to a taxpayer's liability' was challenged in United States v. Arthur Young & Co. The major issue of the proceedings was whether tax accrual workpapers, prepared by a taxpayer's independent auditor during the course of an annual audit, were subject to disclosure to the IRS pursuant to a summons under section 7602 of the Internal Revenue Code of 1954. In reaching its holding, the Supreme Court had to determine whether tax accrual workpapers were relevant to an IRS inquiry within the meaning of section 7602. In addition, if the workpapers were found to be relevant, the Supreme Court had to decide whether the workpapers would be protected from disclosure in order to preserve the integrity of the securities market or because a privilege or immunity attaches to the workpapers.