Full opinion text
RULING AND ORDER STUART, Chief Judge. The Court has before it the parties’ objections to Magistrate Longstaff’s July 26, 1982 Report and Recommendation (hereinafter Report). A copy of the Report is hereto attached as Appendix A. The procedural history of this action is set forth at the outset of the Report and will not be repeated herein. The parties have not objected to the analysis and conclusions contained in Divisions I and II of the Report. The Court has reviewed these well-reasoned divisions and hereby adopts them in their entirety. Petitioners’ Objections to Division III of Report Petitioners object to Magistrate Long-staff’s decision to permit the Siglins to describe some of the listed documents in more detail in an attempt to cure some of the list’s currently deficient descriptions. Petitioners argue that the burden upon the Siglins was clear from the outset and that any curable deficiencies in the documents’ descriptions resulted from the Siglins’ own tactical decision to withhold the necessary detail from descriptions contained in the January 5, 1982 list. Although the Court is not unsympathetic to the concerns voiced by the IRS in opposition to supplementation, the Court believes that the Siglins should be afforded an opportunity to supplement their descriptions in all of the recommended instances, as well as in other instances noted below. This is not a case where claims of privilege were asserted in blanket fashion. Too detailed descriptions, if disclosed to the IRS, might well reveal information truly entitled to privileged protection against disclosure. The party resisting disclosure is forced to unilaterally strike the difficult balance between too little and too much detail in describing the documents claimed to be privileged. Where, as here, a good faith effort by that party errs on the side of too little detail, supplementation furnishes an appropriate mechanism by which the balance may be refined. Thus, petitioners’ general objection to supplementation is hereby overruled. Petitioners also object to the Report’s conclusion that Willis was acting as a professional legal adviser in preparing tax returns for the Siglins. Both the Magistrate and the parties have employed the following definition of the attorney-client privilege: Where legal advice of any kind is sought from a professional legal adviser in his capacity as such, the communications relating to that purpose, made in confidence by the client, are at his instance permanently protected from disclosure by himself or by the legal adviser, except the protection be waived. 8 J. Wigmore, Evidence § 2292, at 554 (McNaughton rev. 1961). This summons enforcement proceeding raises a difficult and serious question: When a client communicates to his or her attorney for the purpose of securing the attorney’s tax return preparation services, has the client sought “legal advice”, within the meaning of the privilege? The parties and Magistrate. Longstaff have exhaustively analyzed the many facets of this question and have ably canvassed the pertinent case-law. The Court is well aware of the need for clear guidelines designed to foster reasonable expectations on the part of both lawyers and their clients. Lawyers and clients are entitled to adequate forewarning as to whether information communicated by the latter to the former will be protected against unwanted, compelled disclosure at some future time. Having reviewed the caselaw and the parties’ arguments, the Court is of the opinion that, as a general rule, where a client entrusts the task of income tax return preparation to his or her lawyer, the client’s communications related to that task are not made for the purpose of seeking “legal advice”, within the meaning of the attorney-client privilege. Income tax preparation can be legally performed by lawyers and nonlawyers, alike. Income tax return preparation undeniably involves the application of the tax laws to each taxpayer’s unique financial circumstances. However, although that fact might support a lawyer-nonlawyer distinction in other contexts, the Court does not believe it compels such a distinction in the income tax return preparation context. Unlike most other areas in which statutes impose legal obligations on the citizenry, in the income tax return preparation context the government has researched and interpreted the tax laws for the taxpayer in advance. The results of the government’s efforts are manifested in the variety of income tax return preparation instructions and informational publications issued by the government. These instructions and publications are supposedly written in everyday language, to permit a taxpayer to prepare his or her own return. To the extent that the taxpayer cannot understand the instructions or simply does not wish to be subjected to this universally-frustrating task, the taxpayer is free to engage the services of lawyer or nonlawyer tax return preparers, who can also find guidance in the government-issued instructions and pamphlets. The Court is not unmindful that questions occasionally arise in the income tax preparation context which require research and interpretation of the tax statutes and regulations beyond that manifested in the government-prepared instructions and pamphlets. However, on balance, the differences between lawyer and nonlawyer income tax return preparers are ones in degree, not in kind. The Siglins and the Report relied upon the following authority in concluding that, in all instances, the Siglins had communicated with Willis for the purpose of seeking legal advice: It is not easy to frame a definite test for distinguishing legal from nonlegal advice. * * * The most that can be said by way of generalization is that a matter committed to a professional legal adviser is prima facie so committed for the sake of the legal advice which may be more or less desirable for some aspect of the matter and is therefore within the privilege unless it clearly appears to be lacking in aspects requiring legal advice. Obviously, much depends upon the circumstances of individual transactions. Diversified Industries, Inc. v. Meredith, 572 F.2d 596, 610 (8th Cir.1977) (en banc), quoting 8 Wigmore, supra, § 2296 (emphasis included). Although the Court could read the “lacking in aspects requiring legal advice” phrase strictly and hold that income tax preparation does not require legal advice, the Court believes the better approach is to hold the Diversified presumption inapplicable in the income tax return preparation context. The Court believes that in its disinclination to apply the Diversified test in that context is warranted by the Court of Appeals’ heavy reliance in Diversified on considerations not implicated by the instant action; to wit: (1) The Diversified law firm’s assignment involved analyzing the facts revealed by its investigation, with an eye toward evaluating the legal propriety of the corporation’s actions and recommending possible future courses of action; (2) The nature of the Diversified law firm’s assignment was such that it could not be wholly performed by an accountant and/or a lay investigator; (3) The public policy favoring corporate self-discipline would be advanced by according the privilege’s protections to in-house investigative interviews conducted by necessarily independent professionals. See Diversified, supra, 572 F.2d at 610. Moreover, the Court’s refusal to apply the Diversified test in the income tax return preparation context is consistent with the Circuit’s earlier opinion in Canaday v. United States, 354 F.2d 849, 854 (8th Cir.1966) (attorney-client privilege inapplicable because lawyer who filled out client’s tax return “acted not as a lawyer but merely as a scrivener”). See also United States v. Davis, 636 F.2d 1028, 1043 (5th Cir.), cert. denied, 454 U.S. 862, 102 S.Ct. 320, 70 L.Ed.2d 162 (1981) (tax return preparation is “primarily an accounting service”). However, the Court is of the opinion that where tax planning advice is sought from a lawyer, the “legal advice” prong of the Wigmore formula is satisfied. In the Court’s opinion, there is a marked distinction between tax planning and income tax return preparation. Tax planning is concerned with current or future tax periods. It entails advising a client on how best to structure contemplated financial transactions, decisions, or occurrences from a tax consequences standpoint; the identification of the various means by which a particular tax objective of the client can be achieved; and other before-the-fact research and advice. The Diversified presumption would be applicable to tax planning. Income tax return preparation, on the other hand, involves closed tax periods and entails evaluating the tax consequences of previously-consummated transactions and occurrences; compiling the information pertinent to those transactions and events; categorizing, classifying, and otherwise organizing that information in a way which corresponds with the classifications and categories appearing on tax return forms; selecting among the various available tax forms; electing the most advantageous tax filing status; computing the final figures to be included on the taxpayer’s return on the basis of the raw information available; completing the tax return; and other after-the-fact services ultimately aimed at satisfying the disclosure requirements for the tax period in question. Such information routinely furnished by taxpayers to their nonlawyer income tax return preparers probably will not be protected by the privilege. However, it should be noted that not all after-the-fact tax matters are to be regarded as falling within the income tax return preparation function. For example, a taxpayer under civil or criminal tax investigation might well seek an attorney’s counsel as to the prospects of civil or criminal liability and the best way for the client to avoid or minimize any such liability. In the example given, the Court would view the taxpayer to have sought “legal advice * * * from a professional legal adviser in his capacity as such,” within the meaning of the privilege. This would hold true, even though the attorney might ultimately advise the client to file an amended return. See United States v. Cote, 456 F.2d 142, 144 (8th Cir.1972) (decision whether to file an amended return in face of IRS investigation “undoubtedly involved legal considerations”). On the other hand, where no such investigation is pending or threatened, a lawyer’s preparation of an amended tax return would probably not be viewed as falling outside the ambit of the tax return preparation function. Petitioners next object to the Report’s finding that “Willis was acting in a legal capacity in preparing real estate documents and contracts for the Siglins.” Report at 10. Although the Court has declined to apply the Diversified presumption in the income tax return preparation context, the Court is of the opinion that the Diversified presumption should and does apply in the context of Willis’ preparation of real estate documents and contracts for the Siglins. The Diversified presumption is rebuttable. See Diversified, supra, 572 F.2d at 610. However, the IRS has not objected to the Report’s failure to afford petitioners an opportunity to supplement their attempts to rebut that presumption, nor has the IRS sought to require the Siglins to supplement their descriptions so as to afford the IRS a fair opportunity to meet its burden. Accordingly, the Court hereby overrules this objection. Petitioner’s fourth objection relates to the Report’s findings that compliance with the summons would implicitly authenticate documents prepared by the Siglins and that such documents can only be obtained via a grant of use immunity from the government. This objection will be addressed in connection with intervenors’ sixth objection, post at 1197. Finally, petitioners object to the Report’s findings (1) that the IRS has failed to establish that it has substantial need for privileged work product documents, and (2) that the IRS has failed to show that it is unable to obtain the information elsewhere without undue hardship and has substantial need for that information. The IRS argues that it did not have a fair opportunity to meet its burden because the Siglins’ descriptions of these documents were insufficient to permit such a showing. The IRS complains that, although the Siglins were permitted to supplement inadequate descriptions in other areas, no such supplementation was permitted or required as to these documents, thus depriving the IRS of the additional information it needed to attempt to meet its burden. Although the requested supplementation might at first glance appear helpful, the Court’s own in camera examination of the 23 documents in question has persuaded it that such supplementation would be pointless. Eight of the documents claimed privileged under the work product doctrine are photocopies of generally-available legal authorities (e.g., agency decisions which are public records, administrative code provisions, published treatises, and the like), which the IRS could easily obtain elsewhere. Some of these photocopies bear notations and underlining of and by Willis or his legal staff. The Court does not believe that the IRS is entitled to discover these notations and indications of emphasis. Ten of the documents contain attorney impressions, conclusions, or opinions and are entitled to nearly absolute protection. In re Murphy, 560 F.2d 326, 336 (8th Cir.1977). The Court is satisfied that this case does not present “very rare and extraordinary circumstances,” ibid., rendering such matters discoverable. The information in one of the documents is plainly obtainable elsewhere without undue hardship, while two of them contain no information for which the IRS could conceivably have “substantial need.” The Court is of the opinion that the two remaining documents do not constitute work product and should, therefore, be disclosed, unless they are otherwise privileged. The Siglins have asserted that these two documents are protected against disclosure by the attorney-client privilege, in addition to their claim of work product protection. Neither of these two documents are communications from the Siglins to Willis or Willis’ assistants. Nor can they arguably be deemed to reflect client confidences made to obtain legal advice. Accordingly, the Court is of the opinion that the summons should be enforced as to Documents Nos. 20 and 21. Intervenors' Objections to Division III of the Report. Intervenors have grouped various specific objections into six general objections pertaining to the following types of documents: (1) Drafts and unexecuted documents from which client confidences can be inferred, (2) Preliminary drafts of and calculations on tax forms, (3) Attorney research reflecting client confidences, (4) Attorney notes, (5) Communications by or with third parties, (6) Pre-existing documents which would have been privileged in the Siglins’ hands under the Fifth Amendment. The Siglins have specifically listed the Category 1 documents with respect to which they object to the Magistrate’s recommendation that the summons be enforced. The Court is of the opinion that the summons should be enforced as to any documents, which were claimed privileged solely under Category 1, which documents the Magistrate recommended be disclosed, and to which recommendation the Siglins have not specifically objected. The Siglins’ first two objections will be addressed in combination, in view of their similarities. The Siglins object to the Report’s conclusion that the summons should be enforced as to undisclosed preliminary drafts of documents (including tax forms), which documents were ultimately disclosed to the IRS or other third parties in final drafts that differed from the preliminary drafts. The Report concluded that the preliminary drafts are of “documents of a type designed to be disclosed to third parties”, were not intended to be confidential and therefore are unprivileged. The Report alternatively noted that the preliminary drafts in all likelihood constituted “underlying detail” of information already reported to the IRS and, accordingly, the drafts were not privileged. Finally, the Report specifically concluded that information contained in Willis’ drafts of and preliminary computations on tax forms “is assumed to have been intended to be transmitted to the IRS and is therefore not confidential.” Chief Judge Urbom has cogently analyzed the dangers entailed by judicial inquiries into whether a client intended that his or her attorney disclose to third parties information which the attorney ultimately did not in fact so disclose. United States v. Schlegel, 313 F.Supp. 177 (D.Neb.1970). While noting the argument that information conveyed by the client to an attorney for use in the preparation of an income tax return is intended to be transmitted to the IRS and, thus, unprivileged, Chief Judge Urbom nevertheless concluded that ... a more realistic rule would be that the client intends that only as much of the information will be conveyed to the government as the attorney concludes should be, and ultimately is, sent to the government. In short, whatever is finally sent to the government is what matches the client’s intent. Id. at 179. The Court is of the opinion that the adoption of the Schlegel rule is warranted, and should extend to all information conveyed by the client to the attorney and not disclosed by the attorney to any third party. In adopting the Schlegel rule, the Court does not intend to alter or eliminate the established principle that disclosure of information via submission of a tax return effects a waiver as to the details underlying the information reported. See United States v. Cote, supra, 456 F.2d at 145 (and authorities cited therein). Moreover, the Court wishes to emphasize that the Schlegel rule relates only to the client’s intent as to confidentiality and does not eliminate the need for the Siglins to establish all other aspects of the privilege, including that aspect requiring that the communication have been made for the purpose of obtaining legal advice. See ante at 1189-1191. The Report applied the Cote “underlying detail” rule as an alternative ground in support of the Report’s conclusion that the preliminary drafts were not entitled to the protection of the privilege. Financial information reported on a tax return often consists of summary figures or figures derived via undisclosed calculations. “Underlying detail” of financial figures disclosed on a tax return consists of (1) the amount, character, and source of the components represented by the reported figure and (2) the mathematical computations employed to derive the reported figures and such figures’ components. In short, the IRS is entitled to know the accounting details of figures reported on returns, notwithstanding claims of attorney-client privilege. In the instant case, the Court is of the opinion that preliminary drafts of instruments, contracts, deeds, corporate documents, leases, articles of partnership, agreements, escrow forms, promissory notes, and loan applications do not constitute mere underlying detail of information disclosed on the Siglins’ income tax returns. As for preliminary drafts of tax forms and schedules, the Court cannot say that these necessarily constitute mere underlying detail of information actually reported to the IRS. Accordingly, as to the preliminary drafts of tax forms and schedules, the Siglins should be given an opportunity to show that the drafts do not constitute mere underlying detail. Intervenors’ third and fourth objections will also be addressed in combination, in view of their similarities. Both objections pertain to attorney-created materials from which client confidences can allegedly be inferred. The third objection also pertains to newspaper and journal articles contained in Willis’ files on the Siglins. The Report concluded that Willis’ research materials (including the newspaper and journal clippings) would be protected, if at all, only by the “attorney work product” doctrine — not by the attorney-client privilege. As to documents which the Siglins described in the list as “attorney notes,” “calculations,” or “worksheets,” the Report concluded that the Siglins’ failure to describe these materials as being based on or reflective of client confidences rendered the privilege inapplicable. The Siglins take exception to both of these conclusions and request an opportunity to supplement their descriptions of the documents in question. The Report states that, “[i]f from the attorney notes one can infer client confidences, then the attorney notes fall within the privilege.” The Court agrees with that statement. However, the Court perceives no reason to apply a different rule to an attorney’s notes and research materials. If client confidences can be inferred from Willis’ hitherto undisclosed notes or research materials, then those items are privileged against production. Of course, the Siglins still bear the burden of (1) establishing that the attorney notes and research reflect confidential client communications; (2) identifying those communications that are so reflected; (3) establishing that those communications were made to Willis in confidence; and (4) establishing that the privilege has not been waived. In response to the Report’s conclusion that the Siglins failed to assert that the materials and notes in question contained or reflected client confidences, the Siglins argue that such an assertion was implicit in the Siglins’ decision to list the materials and notes as “Category 1” documents; i.e., documents allegedly protected by the attorney-client privilege. See Siglins’ Jan. 5, 1982 List, Appendix A. The effect of accepting the Siglins’ “implicit assertion” argument would be to countenance blanket assertions of the privilege, for it could be argued with equal force that any invocation of the attorney-client privilege carries with it the implicit assertion that each allegedly privileged document possesses all aspects of the Wigmore definition of the privilege. Blanket assertions of privilege have been roundly and soundly condemned. See, e.g., Colton v. United States, 306 F.2d 633, 639 (2d Cir.1962), cert. denied, 371 U.S. 951, 83 S.Ct. 505, 9 L.Ed.2d 499 (1963). The burden is on the proponent of the privilege to establish all aspects thereof, whether with or without the assistance of legal presumptions. The Siglins’ “implicit assertion” theory is untenable. The Siglins’ fifth objection challenges the Report’s failure to afford them an opportunity to supplement their descriptions of some, documents involving third parties. The Court agrees with the Siglins that, if supplementation is permitted with regard to some documents prepared by or disclosed to persons other than Willis or the Siglins, supplementation should be permitted as to all such documents. Accordingly, the Siglins’ fifth objection is hereby sustained. The Siglins should bear in mind that their burden of establishing that the privilege has not been waived by disclosure to third parties cannot be satisfied merely by submitting supplemental conclusory averments. Intervenors’ sixth objection may be broken into two parts. First, the Siglins object to Magistrate Longstaff’s rejection of their theory that papers prepared by the Siglins, or under their immediate supervision, which pertain to their personal business matters, would be absolutely privileged in their hands by reason of the Fifth Amendment privilege against compulsory self-incrimination. Second, they object to the Magistrate’s conclusion that, to the limited extent that the Fifth Amendment privilege would protect against the production of documents prepared and held by the Siglins, the government could remove such protection via a grant of immunity against the use of the Siglins’ act of producing the summoned documents. Because petitioners’ fourth objection also pertains to the Report’s discussion of the government’s use immunity option, the Court will address that objection in connection with the analysis of the second part of the Siglins’ sixth objection, infra, at 1197-1198. The summons at the heart of this enforcement action is directed to respondent Ned Willis, who is attorney for William and Virginia Siglin, the intervenors herein. To the extent that the summons seeks the production of documents, it seeks documents in Willis’ possession. Whatever privileges Willis asserts against the documents’ production are asserted on behalf of the Siglins, not on Willis’ own behalf. The Court does not understand the Siglins to assert that they were compelled by the government to create any of the documents now in Willis’ possession. Thus, the summons’ enforcement would not compel the Siglins to do anything of testimonial or nontestimonial nature. Under these circumstances, to the extent that Willis or the Siglins may be understood to have challenged the summons’ enforcement solely on the basis of the Fifth Amendment privilege against compelled self-incrimination, the Court hereby rejects such challenge. See Fisher v. United States, 425 U.S. 391, 396-401, 96 S.Ct. 1569, 1573-1576, 48 L.Ed.2d 39 (1976); Couch v. United States, 409 U.S. 322, 329-35, 93 S.Ct. 611, 616-619, 34 L.Ed.2d 548 (1973). The documents in question did not come into existence as “communications” from the Siglins to Willis, but were “preexisting documents,” turned over to Willis by the Siglins. Because they are not “communications,” they do not fall within the scope of the traditional attorney-client privilege, as defined by Wigmore. However, the Supreme Court has recognized that, where pre-existing documents would be protected by the Fifth Amendment privilege against compulsory self-incrimination in the client’s hands, a rule holding such documents unprotected by the attorney-client privilege following the documents’ transfer into the client’s attorney’s hands would discourage full disclosure by clients to their attorneys. See Fisher v. United States, 425 U.S. 391, 403, 96 S.Ct. 1569, 1577, 48 L.Ed.2d 39 (1976). Accordingly, the Fisher Court held that where documents, which would have been privileged in the hands of the client by reason of the Fifth Amendment, are transferred to the client’s attorney for the purpose of obtaining legal advice, the attorney-client privilege protects against the documents’ compelled production. Id. at 403-05, 96 S.Ct. at 1577 — 1576. Thus, application of the Fisher rule to pre-existing documents requires the Court to engage in a two-pronged inquiry: (1) Would the documents have been privileged against production in the client’s hands? and (2) Were the documents transferred to the attorney for the purpose of obtaining legal advice? As to the first prong of the Fisher inquiry, the Siglins do not object to the Magistrate’s conclusions that, in order to fall within the scope of the Fifth Amendment privilege in the Siglins’ hands, the pre-existing documents must have been held by the Siglins in an individual capacity, and that such documents must have been prepared either by the Siglins or under their immediate supervision. However, they object to the Magistrate’s conclusion that, because the documents in question were “business-related,” their contents would not have been entitled to Fifth Amendment protection in the Siglins’ hands. The Siglins urge the Court to recognize absolute Fifth Amendment protection for the contents of “personal business” documents prepared by the Siglins or under their immediate supervision. The Siglins’ objection rests in large part upon the following dicta found in Bellis v. United States, 417 U.S. 85, 94 S.Ct. 2179, 40 L.Ed.2d 678 (1974): The [Fifth Amendment] privilege applies to the business records of a sole proprietor or sole practitioner containing more personal information about the individual’s private life. Id. at 87-88, 94 S.Ct. at 2182-2183 (emphasis added); see United States v. Harrison, 653 F.2d 359, 361 (8th Cir.1981) (“It is well established ... that [the Fifth Amendment] privilege applies to the business records of a sole proprietor ..., as well as to documents of a purely personal nature.”) (citing Beilis, supra) (dicta). In Andresen v. Maryland, 427 U.S. 463, 96 S.Ct. 2737, 49 L.Ed.2d 627, (1976), state investigators, in the course of executing a search warrant, seized business records of a sole practitioner from his office. The Andresen Court rejected the attorney’s Fifth Amendment claim, quoting the Fisher Court’s statement that “the Fifth Amendment protects against compelled self-incrimination, not [against the disclosure of] private information.” 427 U.S. at 477, 96 S.Ct. at 2746. Thus, the crucial question in the instant case is whether the Beilis dicta has survived Fisher and Andresen. Although Andresen involved a search warrant, while the instant action involves an IRS summons, the Court fully agrees with the Magistrate that, for purposes of determining the protection to which the contents of those documents are entitled under the Fifth Amendment, it is illogical to distinguish between documents seized in a search and documents obtained via enforcement of a summons. See In re Grand Jury Proceedings (United States), 626 F.2d 1051, 1056 (1st Cir.1980) (“anomalous [to] ... prevent the lesser intrusion of subpoena while permitting the greater intrusion of search and seizure”). Disallowing Fifth Amendment protection for the contents of business-related records does not require the Court to declare the “content theory” of Fifth Amendment privilege dead for all purposes. Fisher’s applicability to nonbusiness, intimate personal papers remains an open question. In re Grand Jury Proceedings (United States), supra, 626 F.2d at 1054, n. 2 (citing Fisher, supra, 425 U.S. at 401, n. 7, 96 S.Ct. at 1576, n. 7). The Court is well aware that the Eighth Circuit has reiterated the Beilis dicta subsequent to Fisher and Andresen. United States v. Harrison, 653 F.2d 359, 361 (8th Cir.1981). However, Harrison’s reiteration of Beilis was, itself, dictum, and the question of the combined impact of Fisher and Andresen on Beilis was not addressed. Although the Siglins argue for a rule that would absolutely protect their business records from disclosure, they also argue in the alternative that such records are protected by the Fifth Amendment because Mr. Siglin’s personal tax liability is “inextricably intertwined” with his records of his business involvement. This fall-back argument seeks to unduly expand the concept of “personal” records. The Siglins apparently believe that the proper place to draw the line of Fifth Amendment protection is between what might be dubbed “personal business records” and “business business records” (contrasting Mr. Siglin’s personal business activities and the business activities of the corporations with which he is involved). The proffered distinction is rooted in the Beilis “sole proprietor” dicta, which, in the Court’s opinion is no longer viable. However, the argument is flawed even if Beilis’ dicta remained viable. In Beilis, the Court held that one of three partners could not invoke the Fifth Amendment to thwart the production of subpoenaed partnership records. A partnership pays no income tax, but is viewed as a mere conduit through which income flows to the partners. Thus, the same “inextricably intertwined with personal tax liability” argument, which could have been made in Bellis, was implicitly, but necessarily, rejected by the Court in that case. Indeed, in Grant v. United States, 227 U.S. 74, 33 S.Ct. 190, 57 L.Ed. 423 (1913), the Court held that the Fifth Amendment did not afford the corporation’s sole shareholder protection against production of the corporation’s records. Finally, to the extent that the Siglins can be understood as arguing that the Fifth Amendment protects against disclosure of their business related documents because truly personal, nonbusiness information is “inextricably intertwined” with business information, their argument proves too much. They should not be permitted to protect otherwise unprotected business records from disclosure simply by commingling personal and business information. Indeed, even if the Fifth Amendment was viewed as protecting against the disclosure of private papers, contra Andresen, supra, 427 U.S. at 477, 96 S.Ct. at 2746, such commingling manifests a lesser expectation of privacy than that in the contrasting situation wherein the two types of information are kept strictly segregated. Thus, even under a “privacy” theory of Fifth Amendment privilege, the documents would likely not be entitled to protection against disclosure under the circumstances present here. In sum, the Court is of the opinion that the Magistrate correctly concluded that the contents of “business-related” documents are not protected by the Fifth Amendment privilege against compulsory disclosure. The Court is further of the opinion that the Magistrate correctly applied Fifth Amendment principles to the facts present' in the instant action. As the Magistrate correctly concluded, those documents not prepared by the Siglins or under their immediate supervision would not be entitled to Fifth Amendment protection against disclosure, were those documents currently in the Siglins’ possession. The Court further agrees that supplementation is required as to the identities of the persons who prepared some of the documents. Finally, the Court agrees with the Magistrate that “compliance with the summons would impliedly authenticate the documents [prepared by the Siglins or under their immediate supervision], and thus * * * [such] documents are within the protection of the Fifth Amendment.” Report at 34, citing United States v. Plesons, 560 F.2d 890, 893 (8th Cir.), cert. denied, 434 U.S. 966, 98 S.Ct. 506, 54 L.Ed.2d 452 (1977); see Fisher, supra, 425 U.S. at 410, 413, 96 S.Ct. at 1580, 1582. While recognizing that those documents prepared by the Siglins or under their immediate supervision are protected against compulsory disclosure by virtue of the Fisher “implicit authentication” rationale, the Magistrate nonetheless concluded that the summons could be enforced as to those documents, “should the government grant the Siglins use immunity as to the testimony implicit in the submission of the documents.” Both petitioners and intervenors object to this conclusion. The Siglins’ objection is based upon their previously-rejected position that the contents of the “Category 2” documents are absolutely privileged against disclosure by the Fifth Amendment. See ante at 1195-1196. Accordingly, their objection is hereby overruled for the same reasons previously relied upon by the Court in rejecting their “absolute privilege” argument. The IRS’ fourth objection rests upon an argument that the decision whether to grant use immunity is properly entrusted to the executive, as opposed to the judicial, branch of the federal government. The Court has no quarrel with that proposition. However, the Court does not understand the Magistrate to have recommended that the Court usurp any executive function. The Magistrate merely identified a choice facing the IRS; he did not make that decision for the IRS. If the Siglins establish by way of supplementation that some •documents are privileged against production under Fisher, supra, then the summons will not be enforced as to those documents. Under such circumstances, the IRS — not the Court — will have to weigh the advantages and disadvantages of granting immunity against the use of the fact of any such privileged documents’ production in response to the summons. Accordingly, the Court hereby overrules petitioners’ fourth objection. As to the Fisher inquiry’s second prong, the Report apparently relied upon its earlier conclusion, in stating without additional discussion that the documents “are pre-existing documents which the Siglins turned over to Willis to obtain legal advice.” (Emphasis added). However, in an earlier part of this Ruling, the Court has noted its disagreement with the Report’s application of the Diversified presumption in the income tax return preparation context. Ante at 1190. In all but seven of their descriptions of the particular “Category 2” documents, the Siglins have asserted that the particular pre-existing document was turned over to Willis to obtain legal advice. To the extent that the Siglins sought Willis’ tax preparation guidance, the Court holds that they did not seek legal advice, within the meaning of the attorney-client privilege. See ibid. In keeping with its favorable attitude toward supplementation, the Court is of the opinion that the Siglins should be afforded an opportunity to supplement their descriptions of the documents claimed privileged under Category 2 so as to specify whether said documents were transferred to Willis to obtain income tax return preparation advice or to obtain “legal advice”, as that phrase has been defined by the Court. In sum, the Court holds as follows: (1) The summons should be and it is hereby enforced with respect to Documents Nos. 1, 20, 21, 41, 46, 47, 103, 117, 125, 126, 136, 155, 156, 157, 228, 237, 240, 241, 242, 243, 244, 245, 246, 249, 287, 289, 301, 303, 304, 305, 306, 307, 320, 325, 357, 359, 360, 361, 362, 363, 364, 365, 366, 367, 368, 369, 370, 371, 372, 373, 374, 375, 376, 377, 378, 379, 420, 421, 422, 423, 437, 441, 450, 453A, 453C, 453D, 453E, 453F, 469, 471, 473, 474, 476, 495, 498, 506, 507, 508, 518, 531, 532, 534, 536, 537, 538, 539, 542, 547, 551, 556, 557, 568, 580, 581, 582, File Cover, 583, 586, 600, 601, 610, 612, 614, 623, 627, 642. Respondent is hereby granted ten (10) days from the date of this Ruling to comply with the summons as to said documents. (2) The summons should not be enforced with respect to Documents Nos. 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17,18,19, 22, 23, 30, 31, 328, 386, 388, 389, 390, 391, 392, 393, 394, 395, 396, 397, 398, 399, 400, 401, 402, 403, 404, 405, 406, 407, 408, 409, 410, 412, 413, 414, 415, 416, 417, 418, 419, 424, 425. (3) The Siglins shall submit affidavits containing supplemental descriptions of all remaining documents not specifically mentioned in the two preceding paragraphs. Having ruled on the parties’ objections, the Court must now establish the ground rules which will govern subsequent proceedings in the above-entitled action. In those instances where the Court has decided to permit supplementation by the Siglins, such supplementation is to be submitted to the Court on or before June 20, 1983. Where descriptive supplementation by the Siglins has been permitted by the Court, such supplementation shall be furnished by way of affidavit and shall contain factual information sufficient to establish all aspects of the attorney-client privilege, including nonwaiver, in accordance with the principles set forth in this Ruling. The Court will review the Siglins’ supplemental affidavits in camera. The Court’s decision to deny the IRS an opportunity to examine the Siglins’ supplemental affidavits reflects the Court’s view that any other approach would furnish the IRS too little information to permit a helpful response, while at the same time furnish too much information to adequately protect any truly privileged documents. However, within ten (10) days of the supplemental affidavits’ submission, the IRS may submit a listing of no more than thirty (30) documents which it believes warrant particularly close scrutiny by the Court. Any documents as to which supplementation is permitted, but which have not been supplementally described within the time allotted, shall promptly thereafter be made available to the IRS pursuant to the summons. In the event that supplemental descriptions submitted by the Siglins do not satisfy all elements necessary to establish the attorney-client privilege, the Court will not afford the Siglins another opportunity to cure those deficiencies but will determine the applicability of the privilege on the description submitted. The Magistrate’s Report and Recommendation is hereby adopted, except insofar as it is inconsistent with this Ruling and Order. IT IS SO ORDERED. APPENDIX A REPORT AND RECOMMENDATION This matter is now before the Court regarding enforcement of an Internal Revenue Service (IRS) summons served upon Attorney Ned Willis of Perry, Iowa. The IRS is conducting an investigation of the federal tax liabilities of Willis’ clients, William M. Siglin and Virginia J. Siglin of Woodward, Iowa, intervenors in this case. On October 16, 1981, the IRS petitioned the Court, pursuant to 26 U.S.C. §§ 7402(b) and 7604(a), to enforce the IRS summons against Willis. On October 26, 1981, Chief Judge Stuart issued an order requiring Willis to show cause why he should not be compelled to testify about and produce the documents described in the IRS petition. The Siglins moved to intervene on November 6, 1981. On November 23, 1981, this matter was referred to United States Magistrate R.E. Longstaff for issuance of a Report and Recommendation. The Iowa State Bar Association moved and was granted leave to intervene in this case as amicus curiae on December 14, 1981. On December 21, 1981, the show cause hearing was held before Magistrate Longstaff, at which time the Court requested that the Siglins compile a list of the documents as to which they were asserting privileges. On January 5, 1982, the Siglins submitted Intervenors’ List of Documents (List), in which protection based on the attorney client privilege or the work product doctrine is claimed for 644 documents. Willis submitted the documents for in camera inspection. The parties have filed briefs in this matter, and have addressed the list of documents filed by the Siglins. Accordingly, this matter is now deemed fully submitted for purposes of issuing a Report and Recommendation. BACKGROUND Willis has represented the Siglins since the late 1960’s, performing a variety of legal tasks for them, including preparation of the Siglins’ federal income tax returns. On March 4, 1981, IRS Special Agent Russell G. Talbot served a summons on Willis. The summons requested Willis to appear before Special Agent Talbot to give testimony relating to the tax liability of William Siglin and to produce for examination books, records, and other data relating to the Siglins and to businesses with which they are associated. The original appearance date of March 19, 1981 was rescheduled to March 31, 1981, and the appearance was continued on June 15, 1981. In these appearances, Willis answered some of Talbot’s questions and produced some of the requested documents, but Willis refused to answer other questions and refused to produce certain documents on grounds of the attorney-client privilege and work product doctrine. The documents for which Willis claims the attorney-client privilege or the work product doctrine have been described and categorized as follows: 1. documents created in the course of the attorney-client relationship; 2. documents transferred by the Siglins to Willis; 3. documents representing Willis’ work product and the work product of a certified public accountant retained by Willis; and 4. documents relating to a time period not covered by the IRS summons. APPLICABLE LAW AND DISCUSSION I. The Siglins’ Right to Intervene Section 7609 of Title 26 provides that persons “entitled to notice of a summons ... have the right to intervene in any proceeding with respect to the enforcement of such summons under section 7604.” The Court finds that the Siglins are so entitled, and their motion to intervene is hereby granted. See Reisman v. Caplin, 375 U.S. 440, 84 S.Ct. 508, 11 L.Ed.2d 459 (1964). II. The IRS Prima Facie Case The IRS issued the summons to Willis pursuant to 26 U.S.C. § 7602(2). In United States v. Powell, 379 U.S. 48, 85 S.Ct. 248, 13 L.Ed.2d 112 (1964), the Supreme Court held that the IRS did not need to meet a probable cause standard to obtain enforcement of its summons. Id. at 57, 85 S.Ct. at 254. Rather, to meet its prima facie case for enforcement, the IRS must show four elements: 1) that its investigation is conducted pursuant to a legitimate purpose; 2) that the summoned data may be relevant to that purpose; 3) that the information sought by the summons is not already within the possession of the IRS; and 4) that the administrative steps required by the statute have been followed. Id. at 57-58, 85 S.Ct. at 254-255. With two exceptions, neither the Siglins nor Willis asserts that the four Powell requirements were not met by the IRS. First, the Siglins claim that seven documents contain information which has already been furnished to the IRS. Four of these documents are 1099 forms, and the Powell requirements do not bar their production. United States v. First Nat’l State Bank, 616 F.2d 668, 673-75 (3d Cir.), cert. denied, 447 U.S. 905, 100 S.Ct. 2987, 64 L.Ed.2d 854 (1980). As for the other three documents, neither Powell nor Section 7605(b) (prohibiting unnecessary examinations of taxpayers) stands as an absolute bar to enforcement of the summons. Where “a summons as a whole is not harassing, when the bulk of the materials summoned is not demonstrably in the possession of the IRS, and where the marginal burden of supplying information which might already be in the possession of the IRS is small ... enforcement of the summons in its entirety is not an ‘unnecessary examination or inspection’ within the meaning of section 7605(b).” United States v. Davis, 636 F.2d 1028, 1038 (5th Cir.), cert. denied, 454 U.S. 862, 102 S.Ct. 320, 70 L.Ed.2d 162 (1981). Since the above three conditions are satisfied in this case, the fact that the information in these seven documents may already be in the possession of the IRS is not a ground that justifies non-enforcement of the summons. Second, the Siglins claim that thirty-three documents are outside the scope of the summons. In the summons the IRS requests records and documents relating to the Siglins and various businesses they are associated with for the period July 1, 1975, through February 28, 1979. The IRS summons also states that the tax years of 1977 and 1978 are under investigation. The Siglins claim that thirty-two of these documents were created after February 28, 1979, for use in preparation of the Siglins’ 1979 tax returns. On the other hand, the IRS argues that the fact these documents were prepared after February 28, 1979, does not indicate they do not pertain to the time frame of the summons. Because the documents might be relevant to the 1977 and 1978 tax years, the IRS contends, the production of the documents should be compelled. The standard of relevancy in IRS summons enforcement cases is “whether the inspection sought ‘might have thrown light upon’ the correctness of the taxpayer’s returns.” Foster v. United States, 265 F.2d 183, 187 (2d Cir.1959), cert. denied, 360 U.S. 912, 79 S.Ct. 1297, 3 L.Ed.2d 1261 (1960). This standard has been further defined to require “an indication of a realistic expectation rather than an idle hope that something may be discovered.” United States v. Harrington, 388 F.2d 520, 524 (2d Cir.1968); accord, United States v. Matras, 487 F.2d 1271 (8th Cir.1973). The burden is on the IRS to meet this standard of relevancy. Powell, supra, 379 U.S. at 57-58, 85 S.Ct. at 254-255. The burden on the IRS to show relevancy is minimal but “not non-existent.” United States v. Goldman, 637 F.2d 664, 667 (9th Cir.1980). In the instant case, the IRS has made no showing as to how these documents “might throw light upon” the 1977 and 1978 tax years. See Goldman, supra, 637 F.2d at 667-68. Thus, the Court finds that these thirty-two documents are outside the scope of the summons. The IRS petition to enforce the summons is denied as to those documents. In addition to the four Powell criteria, the Supreme Court has stated that the section 7602 summons authority does not exist solely to aid criminal investigations. United States v. La Salle Nat’l Bank, 437 U.S. 298, 317 n. 18, 98 S.Ct. 2357, 2367 n. 18, 57 L.Ed.2d 221 (1978). La Salle requires that the summons be issued before the IRS recommends to the Justice Department that a criminal prosecution be undertaken and before the IRS abandons “in an institutional sense ... the pursuit of civil tax determination or collection.” Id. at 318, 98 S.Ct. at 2368. In an IRS summons enforcement proceeding, opponents of enforcement bear the burden of disproving the actual existence of a valid civil tax determination or collection purpose by the IRS. Id. at 316, 98 S.Ct. at 2367. While the Siglins characterize the IRS investigation in this case as “an investigation of the Siglins for criminal tax fraud” (Intervenors’ Brief at 1), neither the Siglins nor Willis argues that the La Salle test is applicable here, and neither has even attempted to meet the burden imposed by La Salle. III. Affirmative Defenses An IRS summons is “subject to the traditional privileges and limitations.” United States v. Euge, 444 U.S. 707, 714, 100 S.Ct. 874, 879, 63 L.Ed.2d 141 (1980); see Upjohn Co. v. United States, 449 U.S. 383, 101 S.Ct. 677, 66 L.Ed.2d 584 (1981). The Siglins and Willis assert three general affirmative defenses — the attorney-client privilege, the Fifth Amendment privilege against self-incrimination, and the work-product doctrine — -to the IRS petition to enforce the summons. A. The Attorney-Client Privilege In federal-question cases, such as the instant one, privilege questions are governed by federal common law in the absence of a constitutional provision, federal statute, or Supreme Court rule on the subject. Fed.R. Evid. 501; United States v. Calvert, 523 F.2d 895, 909 (8th Cir.1975), cert. denied, 424 U.S. 911, 96 S.Ct. 1106, 47 L.Ed.2d 314 (1976). The attorney-client privilege properly belongs to the client, but it is universally accepted that the attorney may raise the attorney-client privilege. Fisher v. United States, 425 U.S. 391, 402 n. 8, 96 S.Ct. 1569, 1577 n. 8, 48 L.Ed.2d 39 (1976) (citations omitted). In this case, both the clients and their attorney have raised the privilege. The privilege is not unlimited, however. The Supreme Court has noted that because the privilege has the effect of withholding relevant information from the factfinder, it should apply only where necessary to achieve its purpose of encouraging clients to make full disclosure to their attorneys. Id. at 403, 96 S.Ct. at 1577. Wigmore’s definition of the attorney-client privilege states that the privilege exists: (1) Where legal advice of any kind is sought (2) from a professional legal adviser in his capacity as such, (3) the communications relating to that purpose, (4) made in confidence (5) by the client, (6) are at his instance permanently protected (7) from disclosure by himself or by the legal adviser, (8) except the protection [may] be waived. 8 J. Wigmore, Evidence, § 2292 (McNaughton rev. 1961) (emphasis and footnote omitted) (hereinafter Wigmore). The burden of establishing the attorney-client privilege rests on the person asserting the privilege. Bouschor v. United States, 316 F.2d 451, 456 (8th Cir.1963). The burden extends to all the essential elements of the privilege. In re Horowitz, 482 F.2d 72, 82 (2nd Cir.), cert. denied, 414 U.S. 867, 94 S.Ct. 64, 38 L.Ed.2d 86 (1973). In the present case, three issues arise out of Wigmore’s definition: whether Willis was acting in a legal capacity; whether the documents in question are of a confidential nature; and, if so, whether the privilege was waived. 1. Capacity in Which the Attorney was Acting Where the attorney-client privilege is asserted, a threshold question is whether the attorney provided services or acted in his or her legal capacity. The Siglins and amicus assert that the preparation of income tax returns by lawyers involves legal work and is not mere scrivening. They claim that lawyers, especially those in small towns and rural areas, often handle a variety of legal tasks for their clients and that preparation of income tax returns is inextricably a part of the total legal services such lawyers provide. Because lawyers traditionally perform many services that are also provided by nonlawyers, it is often difficult to determine whether communications between lawyers and their clients were made for the purpose of seeking legal advice. To resolve this problem, the Eighth Circuit has adopted Wigmore’s test: “ ‘a matter committed to a professional legal adviser is prima facie so committed for the sake of the legal advice which may be more or less desirable for some aspect of the matter, and is therefore within the privilege unless it clearly appears to be lacking in aspects requiring legal advice.’ ” Diversified Indus., Inc. v. Meredith, 572 F.2d 596, 610 (8th Cir.1978) (en banc), quoting 8 Wigmore, supra, § 2296 (emphasis in original). While preparation of tax returns is a task engaged in by nonlawyers as well as lawyers, such preparation ordinarily requires the giving of at least some legal advice. Under the Diversified test, the burden of showing that the matter “clearly appears to be lacking in aspects requiring legal advice” rests on the party seeking disclosure. Id. at 614 (Henley, J., concurring in part and dissenting in part). Because the tax preparation in the instant case was committed to Willis, a professional legal adviser, the IRS bears this burden here. To meet its burden, the IRS relies primarily on two cases holding that preparation of tax returns does not involve legal work. The IRS cites Canaday v. United States, 354 F.2d 849 (8th Cir.1966), which rests on a factual finding made by the district court that the documents prepared by the attorney for the taxpayer and those received by the attorney from the taxpayer were “ ‘not of such a nature as to be the subject of the attorney-client privilege.’ ” Id. at 857 n. 7. The Court found that the attorney who had prepared the defendant’s tax returns was acting “merely as a scrivener,” and “[ujnder these circumstances, the attorney-client relationship was not established .... ” Id. at 857. For several reasons, this Court finds that Canaday must be limited to its facts and must not be considered controlling in the instant case. First, the Canaday court did not apply the Wigmore test which was later adopted by the Eighth Circuit in 1978. Second, Canaday cited Colton v. United States, 306 F.2d 633 (2d Cir.1962), cert. denied, 371 U.S. 951, 83 S.Ct. 505, 9 L.Ed.2d 499 (1963), as support for its holding. Canaday, supra, 354 F.2d at 857. Colton, however, does not support the Canaday holding; it states that “[tjhere can, of course, be no question that the giving of tax advice and the preparation of tax returns . .. are basically matters sufficiently within the professional competence of an attorney to make them prima facie subject to the attorney-client privilege.” Colton, supra, 306 F.2d at 637. See Peterson, Attorney-Client Privi lege in Internal Revenue Service Investigations, 54 Minn.L.Rev. 67, 91-97 (1969). Finally, Canaday’s precedential value has been weakened by the later Eighth Circuit case of United States v. Cote, 456 F.2d 142 (8th Cir.1972), in which the court found that the services of an accountant, retained by the taxpayers’ attorney to conduct an audit of the taxpayers’ books and records after the IRS had begun an investigation of the taxpayers, were a “necessary aid to the rendering of effective legal services to the client,” and thus the accountant’s workpapers were prima facie privileged material. Id. at 144. While Cote held that the taxpayer had waived the privilege by filing amended tax returns, id. at 145, the court cautioned that “[t]oo broad an application of the rule of waiver ... might tend to destroy the salutary purposes of the privilege which invite confidentiality between the attorney and his client.” Id. at 145 n. 4. To decide the instant case on the basis of Canaday and thus order enforcement of the summons against Willis because he was not acting in a legal capacity in preparing the Siglins’ tax returns would be to ignore the language of Cote and, indeed, “destroy the salutary purposes of the privilege.” Id. The IRS also relies on United States v. Davis, 636 F.2d 1028 (5th Cir.), cert. denied, 454 U.S. 862, 102 S.Ct. 320, 70 L.Ed.2d 162 (1981), in which the Fifth Circuit stated: “although preparation of tax returns by itself may require some knowledge of the law, it is primarily an accounting service. Communications relating to that purpose should therefore not be privileged, even though performed by a lawyer.” Id. at 1043 (footnote and citations omitted). This Court notes, however, that the Davis holding appears to be at odds with the Wigmore test adopted by the Eighth Circuit. Even assuming arguendo that tax return preparation is “primarily an accounting service,” the legal services involved in such a task— the research and interpretation of the tax laws and the application of that law to the particular client/taxpayer’s situation— bring it within the Wigmore test. The court in Davis drew no distinction between tax-return preparation by attorneys and by accountants. The court stated that because no accountant-client privilege exists under federal law, “[i]t would make little sense to permit a taxpayer to invoke a privilege merely because he hires an attorney to perform the same task.” Id. at 1043 (footnote omitted). This analysis appears to suggest that the Davis court viewed tax preparation by attorneys in a vacuum — as the only service provided to a particular client — rather than as an integral part of the total legal services lawyers provide their clients. If indeed the attorney in Davis, who was also a certified public accountant, had acted only as a tax return preparer for the taxpayer, the holding in Davis would perhaps be more persuasive. For the reasons discussed above, the court finds that Willis was acting as a professional legal adviser in receiving communications and documents from the Siglins, in giving them tax advice, and in preparing tax returns for them. For the same reasons, the Court finds that Willis was acting in a legal capacity in preparing real estate documents and contracts for the Siglins. The IRS has failed to meet its burden to show otherwise. This holding does not, however, resolve the issue of enforcement before the Court. 2. Confidentiality and Waiver In order for the attorney-client privilege to attach, the communications must have been made in confidence. Bouschor, supra, 316 F.2d at 457. See 8 Wigmore, supra, § 2292. The burden of establishing the privilege is on the party asserting it; this burden extends to all the essential elements of the privilege, including the elements of confidentiality and nonwaiver of the privilege. Weil v. Investment/Indicators, Research & Management, 647 F.2d 18, 25 (9th Cir.1981). A party’s bare assertion that it intended the documents to be confidential does not satisfy the burden. In other words, “the mere relation of attorney and client does not raise a presumption of confidentiality, and the circumstances are to indicate whether by implication the communication was of a sort intended to be confidential.” 8 Wigmore, supra, § 2311, at 600. Similarly, a party’s bare assertion that it did not intend to waive the privilege is an insufficient showing to meet its burden. Weil, supra, 647 F.2d at 25. The privilege may be expressly or impliedly waived. Tasty v. United States, 504 F.2d 332, 336 (8th Cir.1974), cert. denied, 419 U.S. 1125, 95 S.Ct. 811, 42 L.Ed.2d 826. The content of a matter communicated to the lawyer with the intention or understanding it is to be repeated to another, is not within the privilege. Further, “[e]ven if the privilege exists, it is waived when the client volu