Stephen Tornay, Galene Tornay v. United States of America A.R. Demeter, Special Agent, Internal Revenue Service

We must decide if an IRS summons to an attorney for information regarding fees paid by his clients is protected by the attorney-client privilege, or violates the Sixth Amendment right to counsel or the Fifth Amendment right to due process.

BACKGROUND

Stephen and Galene Tornay were the subject of an investigation by the Internal Revenue Service to determine their federal tax liability for tax years 1978 through 1983. The IRS sought to establish tax liability on a net worth, net expenditure basis. It issued summonses to three Oregon attorneys, whom the Tornays had retained in connection with a 1983 criminal conviction, for information regarding fees paid. When the attorneys complied with the summonses, the Tornays discharged them.

The Tornays also retained Seattle attorney Robert Wayne, their present counsel. In 1984, the IRS issued a summons to Wayne for records of financial transactions with the Tornays for the years 1977 through 1984. The IRS withdrew the summons after the Tornays filed a petition to quash.

Later, the IRS issued a second summons to Wayne requesting only the financial records for 1983. The summons complied with the notice and procedure required by 26 U.S.C. §…