A US federal appeals court has ordered aerospace and defence contractor Textron to release papers to the Internal Revenue Service which may contain information relating to transactions similar to tax shelters. The company has so far refused to release papers to the IRS, which may show that 'sale-in-lease-out' (SILO) transactions, where a company purchases equipment from a foreign service and then leases it back to the seller on the same day. But the company's external auditors Ernst & Young, have already seen the documents. Circuit judge, Michael Boudin, told WebCPA: 'Textron apparently thinks it is 'unfair' for the government to have access to its spreadsheets, but tax collection is not a game. Underpaying taxes threatens the essential public interest in revenue collection.' The court's decision may have an impact on accountant work-product privileges which can protect the taxpayer from having to hand over documents that are required by the courts. Boudin added: 'The work-product privilege is aimed at protecting work done for litigation, not in preparing financial statements. Textron's work papers were prepared to support financial filings and gain auditor approval; the compulsion of the securities laws and auditing requirements assure that they will be carefully prepared, in their present form, even though not protected; and IRS access serves the legitimate, and important, function of detecting and disallowing abusive tax shelters.'