United States v. Massachusetts Institute of Technology

The Massachusetts Institute of Technology (MIT) (defendant) served as a tax-exempt government contractor. The Internal Revenue Service (IRS) (plaintiff) began a review of MIT’s records to determine whether it still qualified as tax-exempt and was following reporting requirements. The IRS requested copies of attorney billing statements and minutes of certain committee meetings from MIT. Most of these records were also in the possession of the Defense Contract Auditing Agency (the auditing agency) pursuant to MIT’s government contracts. The auditing agency investigated private contractors to prevent the government from being overcharged for services. MIT provided redacted versions of the documents to the IRS, stating that the redacted portions were protected by the attorney-client privilege, the work-product doctrine, or both. The IRS attempted to obtain the documents from the auditing agency, which refused to provide them. The IRS subsequently served an administrative summons on MIT. The IRS demanded the unredacted disclosure of attorney billing statements and the minutes of nine committee meetings. MIT refused to provide unredacted versions, and the IRS petitioned the district court to compel the disclosure of the fully unredacted documents. The district court ordered enforcement of the summons as to the billing statements and most of the committee minutes. However, the district court found that three of the requested minutes contained privileged material and that the privilege was not waived because MIT claimed those particular minutes had not been disclosed to the auditing agency, although no evidence supported the claim that these minutes were withheld. The court therefore refused to compel the production of those minutes. MIT appealed the order on the attorney-client privilege issue, and the IRS cross-appealed the district court’s refusal to order MIT’s production of the three committee minutes.