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CAVALLARO v. U.S.

No. 01-2237.

284 F.3d 236 (2002)

William CAVALLARO; Patricia Cavallaro, Petitioners, Appellants, v. UNITED STATES, Respondent, Appellee.

United States Court of Appeals, First Circuit.

Decided April 1, 2002.

Attorney(s) appearing for the Case

William H. Paine with whom Mary B. Strother and Hale and Dorr LLP were on brief for appellants.

Edward T. Perelmuter, Attorney, Tax Division, Department of Justice, with whom Eileen J. O'Connor, Assistant Attorney General, Richard Farber, Attorney, Tax Division, Department of Justice, and Michael J. Sullivan, United States Attorney, of counsel, were on brief for appellee.

Before TORRUELLA, Circuit Judge, STAHL, Senior Circuit Judge, and LYNCH, Circuit Judge.

LYNCH, Circuit Judge.

This case raises important questions about the scope of the attorney-client privilege. William and Patricia Cavallaro ("Cavallaros") owned Knight Tool Co., Inc., founded in 1976. Their adult sons owned Camelot Systems, Inc., created in 1987. The Cavallaros and their sons merged their respective corporations in 1995 and, on July 1, 1996, the merged entity sold for approximately $97 million. Subsequently, the Internal Revenue Service began an investigation...

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