in regard to whether or not an l l c does not get the protection of the fifth amendment and that it should not be viewed as a collective entity but  the same fashion as a sole proprietorship under the law the court had ordered on friday of last week when i came home from paris not kentucky that w are those documents kind of off the table if you will and those are not the documents we're talking about my understanding and i i tried to read the record as best i can but i'm on the substitute lawyer here so i didn't get in the benefit of going through  understanding is that the government in some fashion has conceded some documents to the appellant has given some obviously producible documents to the government and that's the only real issue that we're we were before these that order came on friday and the only issue we're here to discuss is whether or not an l l c gets the treatment as a collective entity and therefore no fifth amendment or whether i would have a great concern with with a ruling like that because on my couch where the taxpayer directly gave the documents to the accountant for purposes trick purposes of accountant type  actions in this case every document released the documents were produced to the two gunderson at the request advised order martin lieberman who was miss lou's attorney pending civil forfeiture action determine from her financial records how the two hundred roughly two hundred thousand dollars that have been found could be justified as is coming from legitimate sources  that's what their job was and that's what they did is that they looked at the two thousand and two and two thousand and three financial records of  rendered advice to mr lieberman as to how these records were it wouldn't just apply the two hundred thousand dollars as a legitimate source the problem with coutts would be the following if we're going to find in this case where a lawyer advises his client to take financial records that she would have a fifth amendment privilege for at least as to actor production and tells her to go and give them to agent of that lawyer gunderson to help to have gunderson help him get a guys then what the court would be doing is telling every were in this country or at least the ninth circuit that you better not have your clients ever give up documents to the lawyer to the accountant to any kind of the agent of that lawyer h right is not the law and it's not what i'm suggesting that that would be a ruse this is not a ruse and there's a distinction here and and it gets into the forgive me for looking it gets into nice circuit case two thousand and four and in that case there was an environmental problem and an investigator was retained to help to investigate the case by the lawyers involved  are deemed to be similar to or equivalent to sole proprietorships where those are private papers that the fifth amendment attaches to or at least the after production under the fifth amendment attaches to under h if you take the same documents and you give them to your lawyer or your lawyers agent they don't lose that fifth amendment right similarly when you give them to your lawyer or your lawyers agent they are now being used to render legal advice that you have you have the potential protection of not only the tourney client privilege but the work product privilege what torques that is if you give documents to a lawyer for their agent and they are for one purpose only which is rendering legal advice and they're protected but if you give them to your lawyer or their agent and in the end up being used for two things one that would be privileged similarly in this case mr lew that her lawyers request demand whatever gives the financial documents to gunderson for them to give advice to marty lieberman they do but in the process they also apparently advice or to file an amended two thousand and two tax return and that they will file the two thousand and three tax return so you have a dual purpose issue here the papers originally as protected by the fifth and lose possession are given to the accountants because of her lawyers request and they are used initially for purposes that they would enjoy the fifth amendment protection  to give them all of her financial records for them to leave through and figure out what they need to do to help mr lieberman in the process of leaving through them they go we think you want to do the following with regard to return agreement an initially with gunderson and lieberman where it's strictly for what appears to be forensic then four or five months later it appears there's another supplemental retention agreement where it says we're going to do forensic and we're going to do the simple example would be you go to a tax lawyer you know if the county is going to say i don't think it's even it's even worse if you want to a tax lawyer and said i want you to do my tax returns and that's all you're doing i don't know that that would be protection of the attorney client protection then you're still you're still protected that that's what this is how i retort getting back to what i thought we were here to argue about which is the only issue that everybody briefed to come up here and that is the issue of missing lose elysees whether or not there one person else nice whether or not they should be viewed as collective entities which is what the trial court found versus sole proprietorship and one of the other documents that i gave you is an i r s or a killer in addition to all of the things that indicate that should be given for proprietorship treatment it's you when you're still one person  to your personal return you are personally liable for taxes that you don't withhold unlike corporate entities you're not supposed to keep two separate sets of books like corporations so everything other than that one issue question that she is a one person energy the government's argument here is that she had independent contractor mr too since all of whom could be viewed as being the ones that might produce these records for  first of all there's no facts to support it on the record and second of all it's somewhat absurd to suggest that a jury is not going to fall mind that miss lute could be the only source of these records and not some independent dollars oh well she didn't end up going through customs which was as i understand it you mean you were really really going into things i don't know anything about it never was even close to being sent overseas which is i think one of the reasons why the fourth which we didn't go anywhere and she got most of her money back is because they couldn't prove that she was going to did or intended to spend the money overseas which would have companies there are two reasons advanced in the briefs why that is so and i will reverse the reasons for the purpose of this argument first of all the district court found no inevitable risk of incrimination from the act of production of those documents and so we don't even need to get to the l l c issue the district court made that factual finding after a review of a privilege log and after in camera inspection so to a large extent the district court is in a better position even than the government to articulate why it is that there is no inevitable risk of incrimination and that factual finding is entitle to great deference in this analysis of the second reason in the event that this court were to find that there was an inevitable risk for these documents used to prepare taxes then then the court should inquire into the absence of an l l c privilege these documents to target set the stage include letters and other records of the business at this point the attorney client privilege documents are not on the table those been held out thank you the work product documents the accounts work papers have been held out the only things that are are at issue here are hundreds of pages worth of ledgers and other business records some according to the privilege logs we believe to improve been prepared by ms lou hundreds of other pages of which were prepared by lynch tyrol in sin the outside bookkeeper for the business and so as a matter there's clearly no attorney there's clearly no fifth amendment privilege as to the contents of these documents these are all preexisting business records they are not compelled in the manner in which you produce them there voluntarily created the joe case this is a fifth amendment issue our our our client privilege issue all three of those issues were raised and actually a fourth privilege on a punitive tax return preparation privilege which the district court disregarded  that's reflected in in the record in this case the excerpts of record include the briefing of the parties and the government supplemental excerpts include the court's extended oral argument in which all of these issues were raised and really the focus was the fifth amendment privilege with respect to these documents there was some focus on the underlying protection as well as the act of production and of course it became pretty clear that there was no underlying protection to the substance of the documents as i read the district court's decision she found and this is in the order on your seventy three the jury could plausibly conclude that documents sought from wu were not produced by her that really is addressing the  lack of an inevitability issue regardless of the focus on the entity itself the district court also addressed the l l c issue but but really the primary basis as i read that order is the inevitability regardless of the form of the business under which she conducted her massage operations these are also that's important because these are exactly the types of documents that that we would expect to find in the count office when the tax returns were prepare the case law on whether or not an act of production itself the matter of production is incriminating addresses whether or not the existence of unknown documents are going to be disclosed  actor production or whether the actor production with authenticate the documents well in this case because of the prior forfeiture actions and the production of that report voluntarily the existence is not at issue the report at r thirty three and thirty four identifies a whole host of documents that are generally reflected in the privilege while all of those documents are known to the government before that subpoena is in addition there's really no no authentication that's going to inevitably result in this case based on the specific facts and circumstances of this case and the courts make it clear that this is a fact intensive inquiry contractors the fact that there are massage therapists that these businesses and i would refer in particular to e r thirty three the third item on the list in the report that was produced by the forensic accountant that says copies of receipts for technicians deposits with lou it's very difficult to see how that particular item could inevitably result in incrimination because that clearly references the massage technicians rather than just ms lou herself employee it appears highly unlikely that a person could own and operate multiple massage parlors without any employees and then this is the key line a jury could plausibly conclude that documents sought from with were not produced by her that  really is an issue on a lack of inevitability and again it's a lack of inevitability based as the district court says on the massage technicians i would add that the record supports as well the fact that lynch iran's and this outside bookkeeper can easily again the reason i think this is not a case where we're even close to inevitability is based on the types of documents that are at issue it would be very clear to see inevitable incrimination if for example a subpoena requested an unregistered sawed off shotgun or stolen nail things that are on their face or inculpatory based on their possession business records are not like that and so require a more detailed analysis and in this case based on both the existence being disclosed in the or i think it's still really does not matter because the focus is not again on the nature of the person that's there but simply that there were other people there and again the district court had the benefit of all of these documents and the report to see that there was no inevitability in addition and really probably the primary reason is these documents were used by an account to prepare taxes and as this as judge seiler indicated there really can't be a way for lawyers to advise clients with tax problems to route their documents to the account through then to completely eliminate the possibility of tax unfortunately this case of course presents a dual scenario lou's counsel indicates the government cited to the tour case in the standard of review section in its brief and we do believe that it's also very relevant for the court's analysis here today  follows really the fisher and the terry grand jury cases the issue for whether or not there is there is a privilege it's not just whether the documents are produced for the purpose of giving legal advice but rather when they are necessary for the purpose of giving legal advice and if we look at tour in this dual purpose doctrine it supports the government's position because tour essentially dealt with an environmental compliance issue in which there was some advice and some remediation efforts toward contrast that with the tax scenario when it said in the tax scenario citing to frederick a seventh circuit case there is a readily distinguishable purpose because those taxes have to be paid the account has to rely on the documents in order to file the taxes and those documents cannot possibly be privileged so we agree that work is relevant to the analysis but we would ask the court to look at the towards distinction between environmental compliance and the tax in the area that we have in front of the court today i do want to address the issue of the the l l c is in this case because we do believe that a wholly separate way of finding this is that a limited liability company is an artificial entity that has no privilege as judge prager's and said the prime benefit of the limited liability company is the limitation on liability the liability shield there is a tax implication that that does treat for tax individual and so an l l c really isn't any different in these circumstances miss lou did was that the member the manager of the sole member and the statutory agent so there's no question that she is the sole controlling person there but there's also no question that she had these massage therapist working for her and e r sixty eight is an attachment to one of the government's submissions in the district court which shows that ms will help herself out as the president of lotus land l l c for the purpose a citizenship application now the dallas case dealing more with partnerships outlines probably the best of all the cases the factors in whether or not there is a collective entity and the three main ones are a formal institutional arrangement an organizational structure imposed by the state and holding oneself out to third parties as that independent or artificial entity well there's certainly a formal institutional arrangement because of the liabilit corporate limitation on personal liability and so there is clearly an artificial construct and a formal institutional arrangement there is some organizational structure this is not an l l c does not have to report to the state as much as a corporation does but there are significant reporting requirements there or is a requirement of answering questions that state regulators ask and that certainly is more significantly more than a sole proprietor would have and finally she held herself out to third parties as this independent entity in particular on that citizenship application and so for those reasons the government believes that on the facts on this case this l l  operates sufficiently as a collective entity to preclude the use of the privilege the government also of course believes that under these circumstances there is no inevitable risk of incrimination i have covered most of my prepared remarks on that i'd like to just address the couch dathan and manges cases briefly i think the movement has has signaled to the court the key distinction between couch death and nancy's that is that in those cases the lawyer was not directing the production of the books and records the government believes again based on the procedural history of this case winnowing out already the attorney client privilege and the work product privilege and the absolute separable purpose with the taxes that that is a distinction without any meaningful difference and furthermore the mangers case talks about  delegation by the taxpayer to another person and we really do have here a delegation from ms lou to clifton gunderson and the involvement of the lawyer in that shouldn't shield her from being investigated for the very taxes that that accountant eventually filed on her behalf i see that i have time remaining but i am finished with my remarks unless there are further questions from the panel to put it in  facts upon which she can claim that any of these independent contractors on would be in any position whatsoever to have access to the records or an ownership issue or anything else the records  accrue cash including laws etc so we're not talking about on things from the reports from the independent contractor were talking about the kinds of financial documents that only an owner would would  the constitution intended and that at least in their opinion documents any document created by and individual has the fifth amendment protection based on at least justice thomas reading