In re Grand Jury: Supreme Court Debates Privilege And Tax Advice

In a case involving tax advice, the U.S. Supreme Court debated on the limits of the attorney-client privilege. The case, In re Grand Jury, involved a criminal investigation of an early promoter of Bitcoin who expatriated from the US in early 2014. The Supreme Court was asked to decide whether an unnamed law firm should be forced to turn over documents, which contains both legal advice and tax-return accounting, to a grand jury. The firm refused, claiming that the documents should be protected so long as legal advice was a “substantial purpose” of the communication, but the judge held the firm in contempt.

The question before the court in In re Grand Jury is whether a communication involving both legal and non-legal advice is protected by attorney-client privilege when obtaining or providing legal advice was one of the significant purposes behind the communication.

During oral arguments, the Court struggled with the standard that would protect confidential legal advice without shielding routine business communications. Justice Elena Kagan mentioned that the more demanding standard has a long history, and questioned the firm’s lawyer, asking him “We’ve had the attorney-client privilege for a long time, and until 2014, nobody ever suggested that the test that you’re proposing is the right one.”

[UPDATE 1/25/24: The Supreme Court dismissed the case without a decision.]