Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_05-cv-03792/USCOURTS-cand-4_05-cv-03792-3/pdf.json

Parties Involved:
Christopher Cohan
Respondent
John C. Cohan
Respondent
United States of America
Petitioner

Document Text:

United States District Court

For the Northern District of California

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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA,

Petitioner,

 v.

JOHN C. COHAN, aka Christopher Cohan, 

Respondent.

 /

UNITED STATES OF AMERICA,

Petitioner,

v.

MAX D. GRAY,

Respondent.

___________________________________/

No. C 05-3792 PJH

ORDER RE: PETITIONS TO 

ENFORCE IRS SUMMONSES

No. C 05-3791 PJH

Related Case

The court heard arguments regarding the United States’ Petitions to Enforce Internal

Revenue Service (“IRS”) Summonses issued to respondents John C. Cohan (“Cohan”) and

Max D. Gray (“Gray”) on December 7, 2005. Having considered the parties’ briefs, exhibits,

and pertinent legal authorities, the court rules as follows for the reasons stated at the hearing

and summarized below.

Cohan

Although the parties were not clear in their papers what specific documents were the

focus of the petition to enforce, at the hearing they clarified that what is currently at issue are

the 93 documents which, although responsive to the summonses, were withheld by Cohan as

subject to attorney-client privilege. First, the court finds that the privilege log 

Case 4:05-cv-03792-PJH Document 17 Filed 12/08/05 Page 1 of 3
United States District Court

For the Northern District of California

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provided by Cohan, which shall be supplemented within one week by a declaration to be

prepared by Cohan’s counsel in accordance with the court’s instructions at the hearing, is

sufficient to establish a prima facie case of attorney-client privilege. See In re Grand Jury

Investigation, 974 F.2d 1068, 1071 (9th Cir. 1992). The court denies the government’s

request that it conduct an in camera review of the privileged documents at this time.

Second, the court finds that Cohan has not yet waived the attorney-client privilege by

asserting a reliance on advice of counsel defense. Neither party disputes that once the

defense is asserted as a basis for relief from penalties, the privilege is waived. Accordingly,

once the IRS has issued the expected notice of deficiency and Cohan files a petition with the

Tax Court, Cohan shall immediately advise the government whether he will assert such

defense, and if so, shall simultaneously produce to the government the 93 withheld

documents.

Third, the court finds that Cohan’s efforts to obtain responsive documents from third

parties, specifically KPMG and Presidio Trust, have been reasonable to date. However, as

agreed by the parties at the hearing, government counsel will draft a letter for Cohan’s (or his

counsel’s) signature in one final attempt to obtain third-party documents. In any event, the

government has other means of obtaining this information, including third-party summonses,

which it is free to utilize at any time. 

As the only documents at issue are those withheld as privileged, the petition to enforce

the summonses to compel their disclosure now is DENIED.

Gray

As the 23 documents withheld by Gray are included in the 93 withheld by Cohan, and

because the privilege is Cohan’s to waive, the inadequacy of Gray’s privilege log is not fatal,

and the court’s ruling regarding these 23 documents is the same as that regarding the 93

documents. However, because the government may additionally seek to interview Gray,

Case 4:05-cv-03792-PJH Document 17 Filed 12/08/05 Page 2 of 3
United States District Court

For the Northern District of California

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should Cohan waive the attorney-client privilege by asserting a reliance on the advice of

counsel defense, the court will hold the petition to enforce in abeyance pending Cohan’s

decision. As Cohan’s decision must be made at the time he petitions the Tax Court for relief,

the court anticipates that the government will determine whether to interview Gray within a

short period of time thereafter. Accordingly, the parties shall notify the court jointly in writing

within 90 days of the commencement of proceedings in Tax Court, whether they have resolved

on their own the issues raised by this petition or whether they require the assistance of the

court. 

CONCLUSION

In case number 05-3792 PJH, the petition to enforce the summonses issued to Cohan

is DENIED, on the conditions set forth above. All case management conferences and related

deadlines are VACATED. The court file shall be closed, however, the government may seek

to have the file reopened should Cohan fail to comply with the conditions set forth above.

In case number 05-3791 PJH, the petition to enforce the summonses issued to Gray

shall be held in abeyance pending initiation of a Tax Court action and Cohan’s compliance

with the conditions set forth above. All case management conferences and related deadlines

are VACATED, except that the parties shall submit a status report on June 9, 2006, should

this matter not be resolved by then. 

IT IS SO ORDERED.

Dated: December 8, 2005

 

PHYLLIS J. HAMILTON

United States District Judge

Case 4:05-cv-03792-PJH Document 17 Filed 12/08/05 Page 3 of 3