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memorandum), we conclude that petitioners have neither a
substantial need to discover the fact-based work product in the
Welhaf memorandum nor an inability to obtain a substantial
equivalent of this fact-based work product without incurring
undue hardship.
The Welhaf memorandum suggests and analyzes various
positions respondent might take in the litigation in the instant
case. There is no “smoking gun” in the Welhaf memorandum
establishing that respondent’s position in the underlying
litigation was not substantially justified and thereby possibly
entitling petitioners to litigation costs under section 7430.
Nor is there a “smoking gun” in the Welhaf memorandum that would
prove respondent’s attorney unreasonably and vexatiously
multiplied the proceedings, and thereby entitle petitioners to
litigation costs under section 6673(a)(2). Because the Welhaf
memorandum would not impact the outcome of petitioners’ motions
under sections 7430 and 6673 in the instant case, we conclude
there is no compelling need to discover the memorandum;
petitioners’ desire to discover the Welhaf memorandum is
outweighed by the protection afforded by the privacy privilege
under the work product doctrine.
Accordingly, we sustain respondent’s contention that the
work product doctrine privilege protects both memoranda from
discovery.
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Last modified: November 10, 2007