US Supreme Court Will Decide a Case on Solicitor/Client Privilege in a Tax Context


The U.S. Supreme Court (“Scotus”)  heard oral arguments on January 9, 2023 in a tax case about the scope of attorney-client privilege when there are “dual-purpose communications”—discussions that are partly about legal matters and partly about business. This case will be relevant in future cases heard in Canada which contain similar facts as IGGillis Holdings.

Oral Arguments Here

Docket Here


Generally, a lawyer’s legal advice is privileged. A court cannot order the lawyer or the client to disclose it. But, generally speaking, a lawyer’s nonlegal advice is not privileged. The question becomes, what happens when advice is partly legal and partly nonlegal and the two parts cannot be untangled? In such dual-purpose situations, does the privilege protect all the advice or none of it?

The issue in re Grand Jury is when are dual-purpose business and legal communications protected by the attorney-client privilege and when are they not.

The Scotus addressed the following question: Should the privilege encompass communications where the client’s single primary purpose was to seek legal advice, or should it extend to communications where a significant purpose was seeking legal advice? The issue hinges on the interpretation of ‘primary’ and ‘significant’.

This past Monday the Scotus heard opposing answers to that question. The taxpayer argued that the privilege should protect all client communications “where obtaining or providing legal advice was one of the significant purposes behind the communication,” even if nonlegal advice predominated. The US Government argued that unless legal advice was the client’s “primary” purpose, none of the dual-purpose communications should be privileged.

The difference between “significant” and “primary” may seem trivial, but the Supreme Court’s decision will be incredibly important. A significant-purpose test would expand the reach of the privilege, which may explain why lawyers and business groups, including the American Bar Association and the Chamber of Commerce, filed several (over 13) amicus briefs in support of the taxpayer. An important point made by some of these parties is that the significant purpose test would give lawyers a competitive advantage over nonlawyers who offer the same advice.


A person, whose identity is not publicly known, wished to expatriate from the USA for tax reasons. The United States suspected some criminal activity. It convened a grand jury, which subpoenaed records related to the taxpayer law firm’s work. The law firm produced more than 1,700 documents but claimed that many others were privileged.

In considering whether the attorney-client privilege attached to the disputed dual-purpose communications, the district court used the “primary purpose” test. The district court held that the attorney-client privilege did not protect a subset of documents whose predominate purpose was the procedural aspects of tax return preparation and not tax legal advice.

On appeal, the 9th U.S. Circuit Court of Appeals affirmed the district court’s order. The court held that “the primary purpose test applies to attorney-client privilege claims for dual-purpose communications.” The court described the test as looking at whether the primary purpose of the communication is to give or receive legal advice, as opposed to business or tax advice.

In adopting this test, the court reasoned that common law principles guide the interpretation of the attorney-client privilege’s scope, and at common law, the privilege extends only to communications made for the purpose of facilitating the rendition of legal services. The court also noted that “[t]he natural implication of this inquiry is that a dual-purpose communication can only have a single ‘primary’ purpose.”

This case may have broad implications for cases with similar facts in Canada.  We look forward to reviewing the Scotus judgment once it is published.

Practical Suggestions

A few practical suggestions to avoid this issue occurring in your daily practice:

  1. Try not to comingle legal and non-legal advice.
  2. Use language in the communications that makes it clear one is providing legal advice.
  3. Be mindful of the people receiving the advice. Perhaps limiting the audience is a better way to go.

by Amit Ummat, Ummat Tax Law PC