The Summons Process in General

The United States' system of taxation relies on self-assessment and the good faith and integrity of taxpayers to disclose completely and honestly all information relevant to their tax liability. Nonetheless, "it would be naïve to ignore the reality that some persons attempt to outwit the system." United States v. Bisceglia, 420 U.S. 141, 145 (1975).

Accordingly, Congress has conferred upon the Secretary of the Treasury the responsibility to make accurate determinations of tax liability and has given him broad authority to conduct investigations for that purpose. The Commissioner of Internal Revenue, as the Secretary's delegate, is charged with the duty to make inquiries, determinations, and assessments of all taxes imposed by the Internal Revenue Code. Donaldson v. United States, 400 U.S. 517, 523-524 (1971); United States v. McAnlis, 721 F.2d 334, 336 (11th Cir. 1983), cert. denied, 467 U.S. 1227 (1984); United States v. Harris, 628 F.2d 87 5, 879 (5th Cir. 1980). Section 7601. [FN1]

FN1. Unless otherwise indicated, all statutory references are to the Internal Revenue Code (26 U.S.C.). The Tax Reform Act of 1986, Pub. L. No. 99-514, § 2, 100 Stat. 2085, 2095, redesignated the Internal Revenue Code of 1954 as the Internal Revenue Code of 1986. The summons power is the investigative tool provided by Congress to enable the Commissioner to discharge this investigative responsibility. Section 7602(a) and (b) of the Code authorizes the Secretary of the Treasury to examine records, to issue summonses,[FN2] and to take testimony for the purposes of

(1) "ascertaining the correctness of any return,"

(2) "making a return where none has been made,"

(3) "determining the liability of any person for any internal revenue tax * * *,"

(4) "collecting any such liability," or

(5) "inquiring into any offense connected with the administration or enforcement of the internal revenue laws." [FN3]

The courts have held consistently that Section 7602 endows the IRS with expansive information-gathering authority to encourage effective tax investigations. See United States v. Arthur Young & Co., 465 U.S. 805, 813-815 (1984); La Mura v. United States, 765 F.2d 974, 979 (11th Cir. 1985); United States v. Saunders, 951 F. 2d 1065, 1067 (9th Cir. 1991); Hintze v. IRS, 879 F.2d 121, 125 (4th Cir. 1989); United States v. Balanced Financial Management, Inc., 769 F.2d 1440, 1446 (10th Cir. 1985). [FN4]

FN2. The authority to issue IRS summonses has been delegated to agents of the Criminal Investigation, Examination, and Collection Divisions of the IRS. Codner v. United States, 17 F.3d 1331, 1333 (10th Cir. 1994); United States v. Derr, 968 F.2d 943, 947 (9th Cir. 1992); United States v. Saunders, 951 F.2d 1065, 1067-1068 (9th Cir. 1991). FN3. This fifth purpose (Section 7602(b)) was added to the Code by Section 333(a) of the Tax Equity and Fiscal Responsibility Act of 1982, Pub. L. No. 97-248, 96 Stat. 324 (TEFRA). FN4. As stated by the Seventh Circuit in Holifield v. United States, 909 F.2d 201, 205 (1990):

"The information-gathering authority granted to the IRS under § 7602 is quite broad. Indeed, the Supreme Court has described § 7602 as the 'centerpiece' of a much larger congressional design to endow the IRS with expansive authority to conduct effective tax investigations. United States v. Arthur Young & Co., 465 U.S. 805, 815, 104 S.Ct. 1495, 1502 (1984)."

Consistent with its expansive holding in Holifield, the Seventh Circuit, in United States v. Administrative Enterprises, Inc., 46 F.3d 670, 672 (1995), held that IRS summonses do not expire and "no statute of limitations applies to a petition to enforce a summons." If a respondent refuses to produce documents or give testimony pursuant to a summons, the IRS must seek judicial enforcement of the summons. See Sections 7402(b) and 7604(a). "The IRS, however, has no power of its own to enforce the summons but must apply to the district court in order to compel production of requested materials." United States v. Claes, 747 F.2d 491, 494 (8th Cir. 1984). [FN5]

This judicial involvement provides the appropriate "check" on the executive branch in its exercise of the summons power and serves to safeguard the taxpayer's due process rights. See Reisman v. Caplin, 375 U.S. 440, 449 (1964); United States v. Bisceglia, 420 U.S. at 146; Donaldson v. United States, 400 U.S. at 525; United States v. Gilleran, 992 F.2d 232, 233-234 (9th Cir. 1993); United States v. Bichara, 826 F.2d 1037, 1039 (11th Cir. 1987). The court's role in such an enforcement proceeding, however, is limited to determining whether the particular summons is a legitimate exercise of the IRS's investigative authority; the court is not empowered independently to review the wisdom of the IRS's investigative decisions. Tiffany Fine Arts, Inc. v. United States, 469 U.S. 310, 323 (1985); United States v Barrett, 837 F.2d 1341, 1350 (5th Cir. 1988) (en banc), cert. denied, 492 U.S. 926 (1989); Groder v. United States, 816 F.2d 139, 143 (4th Cir. 1987); United States v. Clement, 668 F.2d 1010, 1013 (8th Cir. 1982).[FN6]

Although the role of the courts in summons enforcement proceedings is limited, one court of appeals has held that the courts may place restrictions on the use of summoned information. See United States v. Author Services, Inc., 804 F.2d 1520, 1525 (9th Cir. 1986) (holding that a district court's order restricting the IRS's ability to disclose summoned materials to other governmental agencies was not an abuse of discretion). Accor d United States v. Zolin, 809 F.2d 1411, 1416-1417 (9th Cir. 1987), affirmed by an equally divided Court, 491 U.S. 554, 556 (1989).[FN7]The decisions in Zolin and Author Services, however, conflict with the Fifth Circuit's decision in United States v. Barrett, 837 F.2d at 1349-1351. In Barrett, 837 F.2d at 1351, the Fifth Circuit overruled the part of its decision in United States v. Texas Heart Institute, 755 F.2d 469 (5th Cir. 1985), upon which the Zolin and Author Services holdings were based. See Church of Scientology of California v. United States, 506 U.S. 9, 14-15 n.7 (1992) (noting the conflict of decisions on this issue).

FN5. While summons enforcement cases frequently are referred to magistrate judges for reports and recommendations, only a district court judge may enter a final enforcement order. United States v. Mueller, 930 F.2d 10, 12 (8th Cir. 1991); United States v. First National Bank of Atlanta, 628 F.2d 871, 873 (5th Cir. 1980); United States v. Jones, 581 F.2d 816 (10th Cir. 1978). Orders granting or denying enforcement are final and appealable, Church of Scientology of California v. United States, 506 U.S. 9, 15 (1992), and are binding on the parties in future litigation. United States v. First National State Bank of New Jersey, 616 F.2d 668, 675 (3d Cir.), cert. denied sub nom. Levey v. United States, 447 U.S. 905 (1980); United States v. Benson, 760 F.2d 862, 863 (8th Cir. 1985).

FN6. It is well established that summons enforcement proceedings are designed to be "summary" in nature and limited to the determination of the IRS's right to obtain needed information. Donaldson v. United States, 400 U.S. 517, 529 (1971); United States v. Barrett, 837 F.2d at 1349. As the Supreme Court's decisions make clear, the judiciary's role in enforcing a summons is not to supervise and direct the IRS's exercise of the summons power, but to simply guard against abuses of that power. United States v. Powell, 379 U.S. 48, 57-58 (1964); United States v. Bisceglia, 420 U.S. 141, 150 (1975). Therefore, where a summons satisfies the Powell requirements (as discussed below) and seeks only relevant and unprivileged documents, the summons should be enforced. See United States v. Abrahams, 905 F.2d 1276, 1285-1286 (9th Cir. 1990) (refusal to enforce summons in toto reversed where IRS satisfied the Powell requirements); United States v. Rockwell International, 897 F.2d 1255, 1262-63 (3d Cir. 1990) (limited enforcement of summons only with respect to plant closing issue reversed where IRS investigation encompassed entire tax return). See also Tiffany Fine Arts, Inc. v. United States, 469 U.S. at 323 (the decision of how many and which tax documents to examine is a matter left to the IRS's discretion).

FN7. Since the affirmance in Zolin on the disclosure issue was by an evenly divided Court, that affirmance is not "authority for the determination of other cases, either in this or in inferior courts." Hertz v. Woodman, 218 U.S. 205, 213-14 (1910). Furthermore, there is a very real question whether in placing restrictions on the IRS's use of summoned information, the courts run afoul of the Anti-Injunction Act (Section 7421(a) of the Code). The Anti-Injunction Act has been construed broadly to prevent the courts from enjoining any aspect of an IRS investigation or any activity necessary to determine tax liability. [FN8] See Reisman v. Caplin, 375 U.S. 440 (1964) (injunction issued against IRS summons dismissed for want of equity jurisdiction); United States v. First Family Mortgage Corp., 739 F.2d 1275, 1278 (7th Cir. 1984) (Anti-Injunction Act barred taxpayer's request for an injunction against IRS's use of summoned information); Jerry T. O'Brien, Inc. v. United States, 704 F.2d 1065, 1066-1067 (9th Cir. 1983), rev'd on other grounds, 467 U.S. 735 (1984) (targets of SEC investigation not entitled to injunctive relief under standards relating to IRS summons enforcement cases). FN8. See, e.g., Lowrie v. United States, 824 F.2d 827, 830 (10th Cir. 1987) (The statute applies not only to the actual assessment of a tax, but is equally applicable to collection.); Zimmer v. Connett, 640 F.2d 208, 210 (9th Cir. 1981) (Section 7421(a) prohibited taxpayers from obtaining an injunction compelling the District Director to grant a hearing before permitting an additional inspection of their books); Koin v. Coyle, 402 F.2d 468, 469 (7th Cir. 1968) (7421(a) barred suit seeking to restrain IRS from using evidence to make tax assessments). Summonses issued to banks or other "third-party record-keepers" concerning the tax liability of another are governed by Code Section 7609.[FN9]

Generally, if a summons is served on a third-party record-keeper and requests the production of records pertaining to a person other than the record-keeper itself, then that other person (a "noticee") must be served a timely notice of the summons. The noticee acquires certain procedural rights, including the right to file a petition in the district court to quash the summons. See Section 7609(b)(2). The timely filing of a petition to quash prevents the Commissioner from examining any summoned records during the pendency of the resultant proceedings. Section 7609(b)(2).[FN10] FN9. As defined in Section 7609(a)(3), the term "third-party record-keepers" means:

A. any mutual savings bank, cooperative bank, domestic building and loan association, or other savings institution chartered and supervised as a savings and loan or similar association under Federal or State law, any bank (as defined in section 581), or any credit union (within the meaning of section 501(c)(14)(A)); p>

B. any consumer reporting agency (as defined under section 603(d) of the Fair Credit Reporting Act (15 U.S.C. 1681a(f)));

C. any person extending credit through the use of credit cards or similar devices;

D. any broker (as defined in section 3(a)(4) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(4)));

E. any attorney;

F. any accountant;

G. any barter exchange (as defined in section 6045(c)(3)); and

H. any regulated investment company (as defined in section 851) and any agent of such regulated investment company when acting as an agent thereof.

FN10. Under Section 7609(b)(2)(A), the petition to quash must be filed within 20 days of the date notice under Section 7609 (a)(2) is given. This filing provision is construed strictly, and the jurisdiction of the district court to entertain a petition to quash ends when the twenty-day period has run. Faber v. United States, 921 F.2d 1118, 1119 (10th Cir. 1990). While a noticee's action brought pursuant to Section 7609(b)(2) is procedurally different from a Government enforcement action brought pursuant to Sections 7402(b) and 7604(a), once suit is filed, the respective burdens of proof on the parties essentially are the same in both types of actions. See S. Rep. No. 97-494, 97th Cong., 2d Sess. 283 (1982) ("although an action to quash the summons must be instituted by the taxpayer, the ultimate burden of persuasion with respect to its right to enforcement of the summons will remain on the Secretary, as under current law. Thus, the Secretary will have to meet all the requirements of United States v. Powell, 379 U.S. 48 (1964), * * *"). Indeed, in most cases instituted by taxpayers/noticees under Section 7609, the United States will counterclaim for enforcement of the summons pursuant to Section 7609(b)(2)(A).[FN11]

FN11. For ease of understanding, the distinctions between actions to quash brought by taxpayers and petitions to enforce filed by the Government will not be addressed further except where the distinction is relevant to the particular discussion. The peculiarities of third-party recordkeeper summonses are discussed in greater detail in part E, infra. To obtain enforcement of a summons, the Government need only make a "minimal" initial showing that the summons is issued for a proper purpose, that the material sought is relevant to that purpose, that the information sought is not already within the Commissioner's possession, and that the administrative steps required by the Internal Revenue Code have been followed.[FN12] United States v. Powell, 379 U.S. 48, 57-58 (1964); United States v. Saunders, 951 F.2d at 1067; United States v. Abrahams, 905 F.2d 1276, 1280 (9th Cir. 1990); Alphin v. United States, 809 F.2d 236, 238 (4th Cir. 1987), cert. denied, 480 U.S. 935 (1987); Liberty Financial Services v. United States, 778 F.2d 1390, 1392 (9th Cir. 1985); United States v. Kis, 658 F.2d 526, 535 (7th Cir. 1981), cert. denied sub nom. Salkin v. United States, 455 U.S. 1018 (1982).

In this regard, the Government's burden is a slight one because an enforcement action is a summary proceeding which is brought "only at the investigative stage of an action against the taxpayer, and 'the statute must be read broadly in order to ensure that the enforcement powers of the IRS are not unduly restricted.'" Alphin, 809 F.2d at 238 (citing United States v. Kis, 658 F.2d at 536; United States v. Balanced Financial Management, Inc., 769 F.2d 1440, 1443 (10th Cir. 1985); United States v. Claes, 747 F.2d 491, 494 (8th Cir. 1984). Accord Saunders, 951 F.2d at 1067; Liberty Financial Services v. United States, 778 F.2d 1390, 1392 (9th Cir. 1985); United States v. Davis, 636 F.2d 1028, 1034 (5th Cir.), cert. denied, 454 U.S. 862 (1981).

"In the years since Donaldson, courts have recognized that a proceeding to enforce a tax summons is a most appropriate candidate for streamlined procedures. The proceeding is designed for the limited purpose of compelling a taxpayer to comply with a summons ..." United States v. McCoy, 954 F.2d 1000, 1004 (5th Cir. 1992).

FN12. Additionally, a summons cannot be enforced if the matter has been referred to the Justice Department for criminal prosecution. Section 7602(c). United States v. Stuart, 489 U.S. 353, 361-365 (1989)("Section 7602(c) forbids the issuance of a summons 'if a Justice Department referral is in effect' with respect to a person about whom information is sought by means of the summons.") Under Section 7602(c)(2)(A), a Justice Department referral is in effect with respect to any person if: i. the Secretary has recommended to the Attorney General a grand jury investigation of, or the criminal prosecution of, such person for any offense connected with the administration or enforcement of the internal revenue laws, or ii. any request is made under section 6103(h)(3)(B) for the disclosure of any return or return information (within the meaning of section 6103(b)) relating to such person. The Government's prima facie showing typically is made through an affidavit or declaration of the IRS agent who issued the summons. See Gilleran, 992 F.2d at 233; Liberty Financial Services, 778 F.2d at 1392; United States v. Samuels, Kramer & Co., 712 F.2d 1342, 1345 (9th Cir. 1983); Kis, 658 F.2d at 536-537; La Mura, 765 F.2d at 979 (an agent's affidavit stating that the four Powell elements have been met is sufficient to satisfy the Government's burden).

If the district court determines that the Government's petition and the supporting affidavit or declaration establish a prima facie showing for the enforcement of the summons, then the court ordinarily issues an order to the summoned party to show cause why the summons should not be enforced. Gilleran, 992 F.2d at 233; Samuels, Kramer & Co., 712 F.2d at 1345; United States v. Bichara, 826 F.2d at 1039. Accord Donaldso n, 400 U.S. at 529. Once the Government establishes its prima facie case, "the burden shifts to the party contesting the summons to disprove one of the four elements of the government's prima facie showing or convince the court that enforcement of the summons would constitute an abuse of the court's process." La Mura, 765 F.2d at 980. See also Powell, 379 U.S. at 58.

Accordingly, the taxpayer, or the party challenging the summons, bears the "heavy" burden of rebutting the Government's prima facie showing for enforcement of a summons (Abrahams, 905 F.2d at 1280; Liberty Financial Services, 778 F.2d at 1392; Claes, 747 F.2d 494) and must, in this regard, show the existence of "substantial deficiencies in the summons proceedings". United States v. Newman, 441 F.2d 165, 169 (5th Cir. 1971); United States v. Dynavac, Inc., 6 F.3d 1407, 1414 (9th Cir. 1993); Abrahams, 905 F.2d at 1280. Mere allegations of wrongful conduct are insufficient. United States v. Leventhal, 961 F.2d 936, 940 (11th Cir. 1992) (The burden on the contesting party is a heavy one, requiring allegation of specific facts and introduction of evidence); Liberty Financial Services, 778 F.2d at 1392. [FN13] FN13. In United States v. Gertner, 65 F.3d 963, 967 (1st Cir. 1995), the court stated that "taxpayer must articulate specific allegations of bad faith and, if necessary, produce reasonably particularized evidence in support of those allegations." The court also held that the taxpayer need not "give lie to the [government's] prima facie case," but only need "create a 'substantial question in the court's mind regarding the validity of the government's purpose'." Ibid.

COMPULSORY PRODUCTION OF DOCUMENTS

The provisions of the United States Code regarding summons enforcement proceedings, 26 U.S.C., §§ 7601 through 7610, have over the last three decades been the subject of much litigation and consequently have been construed by the federal courts of appeals as well as the United States Supreme Court.

In Reisman v. Caplin, 375 U.S. 440, 84 S.Ct. 508 (1964), the Supreme Court held that a witness or taxpayer could challenge an I.R.S. summons on any appropriate grounds and may assert as a defense to the proceedings the fact that the materials sought by the I.R.S. relate solely for use as evidence in a criminal prosecution. In United States v. Powell, 379 U.S. 48, 85 S.Ct. 248 (1964), the Court outlined four requirements which must be shown before any summons can be enforced. In Donaldson v. United States, 400 U.S. 517, 91 S.Ct. 534 (1971), the Court held that an I.R.S. summons could lawfully be used for a criminal investigation provided the summons also had a civil purpose. In Couch v. United States, 409 U.S. 322, 93 S.Ct. 611 (1973), the Court held that the Fifth Amendment to the U.S. Constitution did not protect tax records in the possession of a taxpayer's accountant. In United States v. Bisceglia, 420 U.S. 141, 95 S.Ct. 915 (1975), the Court allowed the issuance of a John Doe summons for the purpose of investigating a $40,000 deposit of $100 bills.

In Fisher v. United States, 425 U.S. 391, 96 S.Ct. 1569 (1976), the Court held that the Fifth Amendment did not protect tax records in the possession of the taxpayer's attorney. See also United States v. Rylander, 460 U.S. 752, 103 S.Ct. 1548 (1983). This line of cases clearly shows that the Internal Revenue Service has very broad summons authority and may secure virtually any record or document in the possession of a third party. I.R.S. summonses are issued to two separate and distinct classes of persons, with one class representing third parties who have possession and custody of books and records of the taxpayers under investigation, and the other class comprising taxpayers under investigation.

A summons enforcement action is utilized when compliance with the summons has not been obtained due to the taxpayer notifying the third party not to comply, by the institution of a suit to enjoin enforcement, or by the refusal on the part of the taxpayer to comply when summons is directed to him. When the Service proceeds to enforce a summons issued to either a third party recordholder or the taxpayer himself, its burden of proof is very minimal and amounts to nothing more than proof of compliance with the requirements of Powell, supra; see United States v. Will, 671 F.2d 963 (6th Cir. 1982). Whereas the burden of proof upon the Service is relatively light in summons enforcement actions, a taxpayer opposing enforcement of the summons has a far heavier burden to carry. Basically, a taxpayer seeking denial of enforcement of the summons has available three defenses:

(a) bad faith;

(b) institutional posture, and

The "bad faith" defense is based upon Reisman v. Caplin, supra, and Donaldson v. United States, supra, and involves those situations wherein the summons has been issued for the improper purpose of gathering 1 evidence needed for a criminal prosecution after referral to the Department of Justice. The "institutional posture" defense is based upon United States v. LaSalle National Bank, 437 U.S. 298, 98 S.Ct. 2357 (1978), and relates to those situations when the Service has made an institutional commitment to criminally prosecute the taxpayer under investigation but desires to withhold referral to the Justice Department to allow for the gathering of additional evidence needed for a successful criminal prosecution. [1] These two defenses are most often utilized by a taxpayer when intervening in a third party summons enforcement action or commencing an action to enjoin enforcement of the summons. Although a taxpayer opposing enforcement of a summons issued to him may assert the defenses of "bad faith" and "institutional posture," he will most likely rely upon the third defense available to him, that of the Fifth Amendment.

The history and development of the Fifth Amendment right against self-incrimination has been one of slow but sure expansion of the benefits of its protection. James Madison, the prime author of this provision in the Bill of Rights to the U.S. Constitution, sought this provision to prevent the development in our country of proceedings similar to or identical with Spanish Inquisitions or Star Chamber proceedings. A cursory examination of the William Penn Case, 6 How. St. Tr. 951 (1670), reveals that resort to "Spanish Inquisitions" has on many occasions been desired in order to bring about the efficient operation of governmental machinery; this is what Madison desired to avoid by inserting the Fifth Amendment into our Constitution.

The original intent or purpose for the Fifth Amendment was to compel the government to procure independent evidence of the facts and proof of a crime other than through the mouth of the accused. Without such a requirement and with the availability of procedures such as the Inquisition or Star Chamber, the government could constantly harass law abiding citizens and might on some occasion procure, through duress and coercion, a confession. But as is well known, such confessions are highly suspect; hence we have the protection of the Fifth Amendment.

One of the most appropriate statements concerning the Fifth Amendment and its operation was made by U.S. Supreme Court Justice John Marshall in the case of United States v. Aaron Burr. Chief Justice Marshall, quoted in Counselman v. Hitchcock, 142 U.S. 547, 565, 12 S.Ct. 195 (1892), maintained that a witness could plead the Fifth Amendment not only in situations where his answer to a question would directly implicate him in a crime, but also in response to questions the answer to which would provide a link in the chain of evidence needed to convict the witness of a crime. Protection from compulsory testimony designed to implicate a witness in a crime has been secured through the Fifth Amendment and has been one of the most sacred principles known to American jurisprudence. This principle of the Fifth Amendment protection from compulsory testimony, absent a grant of immunity,[2] has seen no erosion in its application since first expounded and requires but few citations to support it; see Hale v. Henkel, 201 U.S. 43, 26 S.Ct. 370 (1906), Blau v. United States, 340 U.S. 159, 71 S.Ct. 223 (1950), and Hoffman v. United States, 341 U.S. 479, 71 S.Ct. 814 (1951). 2 The question of Fifth Amendment protection for the books, records and personal documents of a witness who may be implicated in a crime was first really considered in Boyd v. United States, 116 U.S. 616, 6 S.Ct. 524 (1886), where the Supreme Court expanded Fifth Amendment protection against compulsory testimony to books and records of the witness. In granting such protection, the Court held:

"And any compulsory discovery by extorting the party's oath, or compelling the production of his private books and papers, to convict him of crime, or to forfeit his property, is contrary to the principles of a free government. It is abhorrent to the instincts of an Englishman; it is abhorrent to the instincts of an American. It may suit the purposes of despotic power, but it cannot abide the pure atmosphere of political liberty and personal freedom," 116 U.S., at 631-32.

"And we are further of opinion that a compulsory production of the private books and papers of the owner of goods sought to be forfeited in such a suit is compelling him to be a witness against himself, within the meaning of the fifth amendment to the Constitution, and is the equivalent of a search and seizure -- and an unreasonable search and seizure -- within the meaning of the fourth amendment," 116 U.S., at 634-35. Since the decision in Boyd, the Supreme Court has on some occasions limited the full import of that historic ruling. In Wilson v. United States, 221 U.S. 361, 31 S.Ct. 538 (1911), the Court held that the Boyd principle did not apply to corporations; see also United States v. Peter, 479 F.2d 147 (6th Cir. 1973); and In Re Grand Jury Empanelled March 8, 1983, 722 F.2d 294 (6th Cir. 1983). Still later, application of Boyd to partnership records was prohibited in Bellis v. United States, 417 U.S. 85, 94 S.Ct. 2179 (1974).

However until 1984, it still appeared that personal, non-corporate tax records of a person with potential criminal liability were still protected by Boyd principles. When the Supreme Court held that Boyd protection did not apply to partnership records in Bellis, supra, it expressly affirmed this proposition by stating:

"The privilege applies to the business records of the sole proprietor or sole practitioner as well as to personal documents containing more intimate information about the individual's private life," 417 U.S., at 87-88. Likewise, Fisher, supra, did not emasculate Boyd in any respect as the issue in that case was completely different; in fact, the Court in Fisher definitely appeared to have sided with Boyd in the last paragraph of its opinion:

"Whether the Fifth Amendment would shield the taxpayer from producing his own tax records in his possession is a question not involved here; for the papers demanded here are not his 'private papers,' see Boyd v. United States," 425 U.S., at 414. Shortly after its decision in Fisher, the Court was confronted with a similar issue in Andresen v. Maryland, 427 U.S. 463, 473-74, 96 S.Ct. 2737 (1976). Here, a search warrant had been issued for the seizure of certain private books and records, and the criminal defendant was not required to produce those records or authenticate them because authentication was achieved by the use of third parties. The Supreme Court in Andresen did not emasculate Boyd in any way and in fact expressly affirmed Boyd:

"Thus, although the Fifth Amendment may protect an individual from complying with a subpoena for the production of his personal records in his possession because the very act of production may constitute a compulsory authentication of incriminating information ..., a seizure of the same materials by law enforcement officers differs in a crucial respect -- the individual against whom the search is directed is not required to aid in the discovery, production or authentication of incriminating evidence."

The Fifth Amendment to the U.S. Constitution states that no person shall be compelled to be a "witness" against himself in a criminal prosecution. Similar provisions exist in the constitutions of the various states of our nation, with some such constitutional provisions following the Fifth Amendment via use of the word "witness" while other provisions offer more expansive protection by stating that no person shall be compelled to give "evidence" against himself in a criminal prosecution. There exist distinct and crucial differences in the type of protection offered under these two different types of constitutional provisions. The protection against being compelled to give "evidence" against the accused is far broader than protection only afforded to "witnessing" and giving "evidence" arguably would include providing to the prosecution documents incriminating to the accused. The protection afforded by the Fifth Amendment is only that of proscribing testimonial compulsion and is not as all encompassing as the provisions prohibiting compulsory production of "evidence." Neither Fisher nor Andresen disturbed the holding in Boyd or Bellis and both are wholly consistent with these two other cases. What the Supreme Court did in these two cases was note the crucial difference between protecting "evidence" and being a compelled "witness"; private papers may no longer be specially protected and in a distinct and different class from other evidence, property or contraband.

What the Supreme Court has directed is that an accused cannot be compelled to produce his own incriminating books and records because such would involve to a degree an amount of authentication of such books and records on the part of the accused; such is tantamount to compelled testimony specifically proscribed by the Fifth Amendment. What the Supreme Court has commanded is that if the government desires to obtain personal books and records and use the same against the accused, it must be done through witnesses other than the accused himself. A survey of pre-1984 decisions reveals the continued vitality of the principles of Boyd and the crucial government-citizen relationship which it protects. In the First Circuit case of In Re Grand Jury Proceedings (Martinez), 626 F.2d 1051, 1056 (1st Cir. 1980), the court found that "personal, self-created business records in the possession of a sole proprietor or practitioner would enjoy a privilege against subpoena."

In the Second Circuit, the case of United States v. O'Henry's Film Works, Inc., 598 F.2d 313 (2nd Cir. 1979), held that a corporate official's Fifth Amendment plea to questions concerning the location of corporate records was valid; see also United States v. Beattie, 522 F.2d 267 (2nd Cir. 1975), United States v. Patterson, 219 F.2d 659 (2nd Cir. 1955), In Re Grand Jury Subpoena Duces Tecum, 657 F.2d 5 (2nd Cir. 1981), In Re Grand Jury Witness (Gilboe), 699 F.2d 71 (2nd Cir. 1983), and United States v. Bobart Travel Agency, Inc., 699 F.2d 618 (2nd Cir. 1983). The three cases of In Re Grand Jury Empanelled March 19, 1980, 680 F.2d 327 (3rd Cir. 1982), In Re Grand Jury Proceedings (Johanson), 632 F.2d 1033 (3rd Cir. 1980), and In Re Grand Jury (Colucci), 597 F.2d 851 (3rd Cir. 1979), demonstrate that the Third Circuit has protected private books and records from compulsory production. In United States v. Henry, 491 F.2d 702 (6th Cir. 1974), the Sixth Circuit quashed an I.R.S. summons to a taxpayer already indicted on a narcotics offense. The Seventh Circuit, faced with a pro se litigant in United States v. Awerkamp, 497 F.2d 832 (7th Cir. 1974), who was prematurely raising Fifth Amendment objections to the enforcement of an I.R.S. summons, held that the taxpayer could make specific Fifth Amendment pleas to questions directed at him when he complied with the order of enforcement. In two other Seventh Circuit cases, Hill v. Philpott, 445 F.2d 144 (7th Cir. 1971), and United States v. Dickerson, 413 F.2d 1111 (7th Cir. 1969), that court held that the records of an individual taxpayer were immune from a summons.

The Eighth Circuit, in Isaacs v. United States, 256 F.2d 654 (8th Cir. 1958), held a Fifth Amendment plea of a corporate official to be valid when he responded to questions relating to $99,000 in checks written by the corporation. Another Eighth Circuit opinion in United States v. Plesons, 560 F.2d 890 (8th Cir. 1977), would have granted protection to the records of a doctor if he had raised his Fifth Amendment plea to a grand jury subpoena before testifying about those records. In the Ninth Circuit cases of United States v. Cohen, 388 F.2d 464 (9th Cir. 1967), and United States v. Helina, 549 F.2d 713 (9th Cir. 1977), protection of a taxpayer's records from production was upheld. The above cases demonstrate that the great weight of authority in the various circuits has been that an individual taxpayer's records are protected from compulsory production because of the Fifth Amendment.

The Fifth and Eleventh Circuits have apparently treated this precise issue more often than the others and have conclusively held that tax records of an individual are immune from production on the basis of Boyd. In Stuart v. United States, 416 F.2d 459 (5th Cir. 1969), In Re Grand Jury Proceedings (McCoy), 601 F.2d 162 (5th Cir. 1979), In Re Oswalt, 607 F.2d 645 (5th Cir. 1979), In Re Grand Jury Subpoena (Kent), 646 F.2d 963 (5th Cir. 1981), and United States v. Meeks, 642 F.2d 733 (5th Cir. 1981), this principle was upheld. More specifically in United States v. Davis, 636 F.2d 1028, 1043 (5th Cir. 1981), that court held:

"Their cumulative teaching is that any incriminating papers in the actual or constructive possession of an individual, which he holds in his individual capacity, ... and which he himself wrote or which were written under his immediate supervision, are absolutely protected by the Boyd principle from production by subpoena or equivalent process, regardless of whether they are business-related or more inherently personal in content."

The Sixth Circuit does not deviate in any respect from comparable decisions made in other circuits. In Patty v. Bordenkircher, 603 F.2d 587 (6th Cir. 1979), the court held that the government couldn't compel a criminal defendant to testify concerning his previous criminal convictions where they were relevant to a habitual offender statute. In United States v. Hill, 601 F.2d 253 (6th Cir. 1979), that court acknowledged that a taxpayer could raise Fifth Amendment objections by refusing to answer specific questions. In United States v. Doss, 563 F.2d 265, 275 (6th Cir. 1977), a case involving an indicted defendant called before a grand jury, that court concluded:

"However, upon the trial of the defendant in a criminal case, it would be a clear violation of a defendant's right against self-incrimination under the Fifth Amendment of the Constitution to compel him to take the stand, testify and produce his records, relating to the matter with which he is charged."

The erosion of Boyd principles started in the early eighties. In United States v. Schlansky, 709 F.2d 1079, 1084 (6th Cir. 1983), a case where the taxpayer under investigation was compelled to surrender certain of his records which had previously been in his accountant's possession, the Sixth Circuit held that the three elements of compulsion, testimonial communication and incrimination by such communication were requisites to a valid assertion of the Fifth Amendment:

"Under this focus the key question is whether the compelled production involves compelled testimonial communication. The answer to this question in turn depends on whether the very act of production supplies a necessary link in the evidentiary chain. Does it confirm that which was previously unknown to the government; e.g., the existence or location of the materials? Does it supply assurance of authenticity not available to the government from sources other than the person summonsed? Though the party seeking to avoid compliance does not have to show more than is required to demonstrate that the privilege is properly claimed, he must make some showing that the act of production alone would involve an incriminating testimonial communication."

The Third Circuit case of In Re Grand Jury Empanelled March 19, 1980, 680 F.2d 327 (3rd Cir. 1982), involved the issue of compulsory production of books and records and that court continued to uphold the principles of Boyd. Because of a 6 desire to have the Supreme Court adopt the Schlansky rationale, the government sought and obtained a writ of certiorari with the United States Supreme Court to review the decision in this case. On February 28, 1984, the U.S. Supreme Court reversed the above decision in United States v. Doe, 465 U.S. 605, 104 S.Ct. 1237, 1242 (1984).

In this pronouncement, the Court reversed its former holding in Boyd and held that books and records were no longer protected by the Fifth Amendment. It reasoned that the Fifth Amendment protected only compelled testimony and not books and records, and it relied heavily upon its rationale in Fisher, supra. But while the Court decided to withdraw Fifth Amendment protection to books and records, it held that production of such books and records was entitled to such protection. The Court reasoned that compulsory production of books and records via subpoena or summons is communicative in nature and similar to giving testimony, therefore such production is entitled to Fifth Amendment protection:

"Compliance with the subpoena tacitly concedes the existence of the papers by the taxpayer. It also would indicate the taxpayer's belief that the papers are those described in the subpoena."

The U.S. Supreme Court in Boyd v. United States, supra, clearly held that compulsory production via subpoena or summons of books, records and other documents in the possession of a witness was not permitted by the Fifth Amendment. This decision prevailed for some 98 years and effectively prevented the government from obtaining such written documentation from one having potential criminal liability. In United States v. Doe, supra, the Court changed its construction of the Fifth Amendment and held that the Amendment did not protect such records; and by making this change, a problem not addressed by Boyd arose. If the records are not protected from compulsory production by the amendment, what protection by the Fifth Amendment is left to a witness under process to produce documents? In Doe, the Court analyzed this situation and found that the mere act of producing such documents via compulsion non-verbally provides the following:

(a) Such production concedes that the requested documentation exists; p>

(b) Such production proves that the same are in the witness' possession; p>

(d) The act of production authenticates the documents. Because of these non-verbal but communicative aspects present within any act of production, the Court held that the Fifth Amendment applied to the act of production.

Thus, even though there is no longer any protection afforded by the Fifth Amendment for books and records, the Fifth Amendment's protection for the act of production accomplishes virtually the same result as under the Boyd doctrine. This has proven to be the case as shown by various cases decided subsequent to Doe.

In In re Kave, 760 F.2d 343, 355-56 (1st Cir. 1985), an attorney was permitted to plead the protection of the Fifth Amendment because the request to produce certain documentary evidence would have in effect, under the "act of production" rule, forced her to testify against herself, the court explaining: "The compelled production of such documents is prohibited only if there are testimonial aspects to the act of production itself. ... This rule extends to the business records of a sole proprietor ... In this context, the rule has three elements: The Fifth Amendment protects against compulsory surrender of

(1) personal business records,

(2) in the possession of a sole proprietor or practitioner,

(3) only with respect to the testimonial act implicit in the surrender itself."

For a few years after Doe, its rule was applied to corporate records. The Doe "act of production" rule was followed in In Re Grand Jury Proceedings, 747 F.2d 1098 (6th Cir. 1984), and In Re Grand Jury Matter, 768 F.2d 525 (3rd Cir. 1985), to prevent the compulsory production of corporate and partnership records. However, in Braswell v. United States, 487 U.S. 99, 108 S.Ct. 2284 (1988), the Court held that Doe did not apply to corporate records; see also Doe v. United States, 487 U.S. 201, 108 S.Ct. 2341 (1988). But the application of Doe has continued as to personal and private records. In United States v.(Under Seal), 745 F.2d 834 (4th Cir. 1984), a case decided some seven (7) months after Doe, the Fourth Circuit specifically held that personal and individual records can't be forcibly produced by any process, over a Fifth Amendment objection; see also United States v. Cates, 686 F.Supp. 1185 (D.Md. 1988); United States v. Argomaniz, 925 F.2d 1349 (11th Cir. 1991); and United States v. Sharp, 920 F.2d 1167 (4th Cir. 1990). In Re Grand Jury Proceedings on Feb. 4, 1982, 759 F.2d 1418 (9th Cir. 1985), it was determined that records of a party under investigation in the hand's of his attorney were entitled to protection under the Doe "act of production" rule. See also In re Grand Jury Subpoena Dated April 9, 1996, 87 F.3d 1198 (11th Cir. 1996)(custodian could assert 5th regarding location of unproduced records). Further, there is no "tax exception" to this rule; see United States v. Troescher, 99 F.3d 933 (9th Cir. 1996). See also United States v. Hubbell, ___ U.S. ___ (2000)(case of Webb Hubbell). Thus, according to the rationale of these cases, the compulsory production of private personal records cannot be obtained in view of a valid Fifth Amendment objection. Therefore, it is clear that the decision in Boyd still produces a legal result, even if from its "grave."

CONCLUSION A summons or subpoena for individual books and records, either personal or 8 business, can't be enforced over a Fifth Amendment objection because of the Doe "act of production" rule.

THE CIVIL PROCEEDING

The rule that a party or a witness can plead the right against self-incrimination in civil proceedings has been well established by an abundance of authority. In Lefkowitz v. Turley, 414 U.S. 70, 77, 94 S.Ct. 316 (1973), the U.S. Supreme Court stated this rule as follows:

"The Amendment not only protects the individual against being involuntarily called as a witness against himself in a criminal prosecution but also privileges him not to answer official questions put to him in any other proceeding, civil or criminal, formal or informal, where the answers might incriminate him in future proceedings."

The subsequent decisions of Maness v. Meyers, 419 U.S. 449, 95 S.Ct. 584 (1975), and Pillsbury Company v. Conboy, 459 U.S. 248, 103 S.Ct. 608 (1983), serve only to buttress this basic principle and apply it to specific situations. This rule is followed by the federal appellate courts; see In re Kave, 760 F.2d 343 (1st Cir. 1985); National Life Ins. Co. v. Hartford Accident & Indemnity Co., 615 F.2d 595 (3rd Cir. 1980); Wehling v. Columbia Broadcasting System, 608 F.2d 1084 (5th Cir. 1979); In Re Corrugated Container Anti-Trust Litigation, 620 F.2d 1086 (5th Cir. 1980); In re Morganroth, 718 F.2d 161 (6th Cir. 1983); and United States v. Jones, 703 F.2d 473 (10th Cir. 1983). Decisions on this point by various state courts reveal that this rule is not a modern one. In Morris v. McClellan, 154 Ala. 639, 45 So. 641, 645 (1908), that Alabama court acknowledged that a party in a civil case could claim the right against self-incrimination. In International Brotherhood of Teamsters v. Hatas, 287 Ala. 344, 252 So.2d 7, 21 (1971), the court held:

"The privilege against self- incrimination afforded by section 6 of the 1901 Constitution of Alabama has been held available to a party in a civil action."

Similar decisions have been made by courts in other States in the Union. In State ex rel. Hudson v. Webber, 600 S.W.2d 691, 692 (Mo. App. 1980), a judgment debtor pleaded his right against self-incrimination in answer to questions posed to him regarding his financial affairs, his fear of incrimination being related to federal taxes. The court sanctioned the answers of this party:

"This privilege is available to a judgment debtor in proceedings pursuant to sections 513.380-513.390, RSMO 1978."

The great weight of other State authorities holds that the right clearly applies in civil cases; see Carson v. Jackson, 466 So.2d 1188 (Fla.App. 1985); Lewis v. First 9 American Bank of Palm Beach, 405 So.2d 300 (Fla.App. 1981); Travis Meat & Seafood Co. v. Ashworth, 127 Ga. App. 284, 193 S.E.2d 166 (1972); In re Zisook, 88 Ill.2d 321, 430 N.E.2d 1037 (1982); Martincich v. City of Hammond, 419 N.E.2d 240 (Ind. App. 1981); Whippany Paper Board Co. v. Alfano, 176 N.J.S. 363, 423 A.2d 648 (1980); Banca v. Town of Phillipsburg, 181 N.J.S. 109, 436 A.2d 944 (1981); People ex rel. Anonymous v. Saribeyoglu, 131 Misc. 2d 647, 501 N.Y.S.2d 286 (1986); Byrd v. Hodges, 44 N.C.App. 509, 261 S.E.2d 269 (1980); Ohio Civil Rights Commission v. Parklawn Manor, Inc., 41 Ohio St.2d 47, 322 N.E.2d 642 (1975); Rey v. Means, 575 P.2d 116 (Okl. 1978); Caloric Corp. v. Unemployment Compensation Board of Review, 452 A.2d 907 (Pa. Comwlth. 1982); Ex Parte Stringer, 546 S.W.2d 837 (Tex.App. 1985); Smith v. White, 695 S.W.2d 295 (Tex.App. 1985); Affleck v. Third Judicial District Court of Salt Lake County, 655 P.2d 665 (Utah 1982); Eastham v. Arndt, 28 Wash. App. 524, 624 P.2d 1159 (1981); and In re Grant, 83 Wis.2d 77, 264 N.W.2d 587 (1978).

TAKING THE FIFTH ON TAX RETURNS

There are basically two important Supreme Court decisions regarding the circumstances under which one may assert the Fifth Amendment regarding income tax returns. The first and most important case was United States v. Sullivan, 274 U.S. 259, 47 S.Ct. 607 (1927), where the Court concluded that to assert the Fifth, one must do it on the return. See also Garner v. United States, 424 U.S. 648, 662- 63, 96 S.Ct. 1178 (1976). An example of how today's federal appellate courts address this issue is shown via United States v. Neff, 615 F.2d 1235, 1238 (9th Cir. 1980), where that court held:

"The Supreme Court has stated that the privilege against self-incrimination, if validly exercised, is an absolute defense to a section 7203 prosecution for failure to file an income tax return. Garner v. United States, supra, 424 U.S. at 662-63, 96 S.Ct. at 1186-1187. The Court has also held, however, that the privilege does not justify an outright refusal to file any income tax return at all. United States v. Sullivan, 274 U.S. 259, 263, 47 S.Ct. 607, 71 L.Ed. 1037 (1927). Furthermore, an objection may properly be raised only in response to specific questions asked in the return. Id. See Garner v. United States, 501 F.2d 228, 239 n.18 (9th Cir. 1974) (en banc), aff'd Garner v. United States, supra, 424 U.S. 648, 96 S.Ct. 1178, 47 L.Ed.2d 370.

"We are here faced with a case in which the taxpayer did assert his privilege in response to specific questions in the tax return form, but did so on such a wholesale basis as to deny the IRS any useful financial or tax information. Other circuits, faced with similar wholesale assertions of the privilege against self-incrimination, have concluded that a tax return form which contains no information from which tax liability can be calculated does not constitute a tax return within 10 the meaning of the IRS laws. Once these courts determine that the taxpayer has filed no return, simple application of the Sullivan precedent, which states that the Fifth Amendment will never justify a complete failure to file a return, invalidates the Fifth Amendment defense. E. g., United States v. Irwin, 561 F.2d 198, 201 (10th Cir. 1977), cert. denied, 434 U.S. 1012, 98 S.Ct. 725, 54 L.Ed.2d 755 (1978); United States v. Silkman, 543 F.2d 1218, 1219-20 (8th Cir. 1976) (per curiam), cert. denied, 431 U.S. 919, 97 S.Ct. 2185, 53 L.Ed.2d 230 (1977); United States v. Daly, 481 F.2d 28, 30 (8th Cir.) (per curiam), cert. denied, 414 U.S. 1064, 94 S.Ct. 571, 38 L.Ed.2d 469 (1973)." p>

END NOTES: [1] Pursuant to the 1982 TEFRA, summonses may now be issued solely for a criminal investigation, thus these decisions no longer have any effect. [2] The statutory provisions regarding immunity grants are found in 18 U.S.C., §§ 6001, et seq.

(Last update: July 26, 2002)