(CN) - The government can take back 13 of 14 IRS documents it accidentally handed over to payroll service providers in the film industry, the U.S. Court of Federal Claims ruled.
Most of the documents are protected by attorney-client privilege, the court ruled, allowing the IRS to "claw back" 12 of them on that ground. Judge George Miller ordered the payroll companies to destroy seven of those in their entirety, and to destroy any unredacted copies of the remaining five.
A thirteenth document, the results of a tax audit, is protected under a law shielding taxpayer-specific information, Miller ruled.
The final document, containing an attorney's notes, is not protected because it doesn't "incorporate and reveal a client's communications," the court ruled.
The documents were disclosed during discovery in income-tax dispute.
The payroll companies wanted the government to give them tax breaks on certain production workers, who the companies claim are independent contractors.
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