Washington, DC, September 14, 1995 -- Ruling on an issue of huge importance to law
firms across the nation, a federal appeals court in Boston yesterday affirmed a lower court
finding that "the IRS's purported probe of [a] law firm's tax-related affairs was a hoax"
designed to obtain financial information about one of the firm's clients without going through
procedures established by Congress "specifically to protect the civil rights, including the
privacy rights, of taxpayers."
"We take no pleasure in upholding a finding that government actors constructed a pretext
to avoid due compliance with statutorily prescribed requirements," declared the U.S. Court of
Appeals for the First Circuit in upholding the judgment of the federal district court in U.S. v.
Gertner. The IRS brought the action against former criminal defense lawyer Nancy Gertner --
now a sitting federal judge -- to compel her to reveal information on fee payments made by
one of her clients. The appeals court agreed that the IRS abused the procedures for
subpoenaing law firm records in order to avoid having to convince a court that it had sufficient
evidence to suspect the firm's client of wrongdoing. The trial court had also held that the fee
payment information sought by the IRS was protected by the attorney-client privilege.
"This is a great victory for criminal defense lawyers, who have been maligned and
harassed by the IRS in its ceaseless craving to pry from them privileged information on
clients," commented NACDL First Vice President Gerald B. Lefcourt, a prominent New York
City attorney who represented Judge Gertner at both the trial and appellate levels. "This is the
second federal circuit to hold that the government has been acting unethically while targeting
attorneys who are acting entirely ethically on behalf of their clients," he said.
"The IRS has to obey the law just like the rest of us -- and they need to factor the
constitutional rights of American citizens into their policies for enforcing cash transaction
reporting requirements," noted NACDL President Robert Fogelnest, also a New York City
attorney. "Judge Gertner was meticulous in her observance of her ethical duties and
constitutional responsibilities to her client and her statutory obligation to the IRS, but their
high-handed tactics make it impossible to reconcile these conflicting duties," he added.
Lefcourt, who also chairs NACDL's task force on IRS' cash transaction reporting
requirement, is himself suing the IRS for refund of an "intentional disregard" penalty in the
amount of $25,000 assessed against him last year for declining to disclose client fee payment
information.
Copies of the decision in U.S. v. Gertner are available from NACDL.
National Association of Criminal Defense Lawyers (NACDL)