Opinion
Case No. 04-106-JTM.
October 22, 2004
MEMORANDUM AND ORDER
This is an IRS enforcement proceeding; the matter is before the court on the plaintiff's Motions for Contempt and to Show Cause. On June 10, 2004, the court granted plaintiff's earlier Motion to Show Cause, directing the defendants Larry and Renee Ott to appear and show cause on August 19, 2004. (Dkt. No. 5). The Otts, appearing pro se, filed a Declaration in response to this order which advanced a variety of arguments relating to federal law. Ultimately, however, the Otts represented "their willingness to meet with the IRS and to provide the information the IRS seeks." (Dkt. No. 8). Accordingly, based on this affirmative representation, the court ordered the Otts to meet with IRS representatives on or before September 24.
The government now informs the court that the Otts did appear, accompanied by two persons seeking to act as "witnesses," but refused to answer questions relating to the summons. The Otts insisted as a precondition to answering the government's questions, that the government agents first respond to various questions the Otts wanted to ask. According to Agent Ray Walker, the Otts insisted on his providing certain information, including his "pocket commission" before they would answer any questions. Walker called Martin Shoemaker, a Department of Justice attorney, and the Otts then told Shoemaker they would not comply with any request for testimony or documents until their demands were met. According to Walker, the putative "witnesses" accompanying the Otts were not simply witnesses, but took an active and obstructive role in the meeting, and were ultimately removed by security personnel.
In their response to the government's motion, the Otts make a variety of complaints, including: (1) that they were treated "unfairly" at the meeting, in that Walker called Shoemaker, and thus were subjected to "Gestapo and Klan-like collaborative tactics," (2) that Walker's "real agenda" at the meeting was to induce the Otts to sign an IRS Form 872, Consent to Extend the Time to Assess Tax, and that the Form 872 is "essential to the case for the IRS . . . meeting the November 5, 2004 deadline to complete the assessment,"(3) that they are the victims of "a surreptitious witch-hunt, for inconsequential documents," and (4) that their rights under the Fifth Amendment were violated. (Dkt. No. 18, at 2-5). The Otts further demand the removal of Walker and Shoemaker from the case.
The Otts's demands are without merit and are denied; their arguments justifying their disregard of the court's order — and their affirmative representation to this court that they would cooperate — are groundless. The Otts may have been invited to sign a Form 872, but that is not a prerequisite to the maintenance of this action, since 26 U.S.C. § 7609(e)(2) stays the time for assessment while this enforcement action is pending. Nor may the Otts be heard to complain with respect to whether they should be expected to comply with the court's order. Even assuming there were some validity to the Otts's arguments, those arguments should have been presented to the court directly upon the issuance of the summons. Instead, and after the court's earlier order to show cause, the Otts affirmatively represented to the court their willingness to cooperate and appear to answer the government's questions and produce the requested documents. Thus, the question of whether the original summons and order were proper is no longer before the court. Maggio v. Zeitz, 333 U.S. 56, 69 (1948). The issue before the court is whether the Otts disobeyed the order of the court.
And there is none. There is no Fifth Amendment right to refuse to produce existing documents. United States v. Teeples, 286 F.3d 1047, 1049-50 (8th Cir. 2002). The documents referenced by the government are directly relevant to the investigation of civil tax liabilities.
It is beyond question that they have done so. The court's order of August 19, 2004 was unequivocal: the Otts were ordered to "meet with the IRS and comply with the summonses on or before September 24, 2004." The order does not permit the Otts to attach preconditions, qualifications, or self-generated obstructions, to that compliance. The defendants are in contempt of the court's order of August 19, 2004.
The government's motion to show cause (Dkt. No. 11) is granted, as is the government's Motion for Contempt. (Dkt. No. 12). The Otts are again ordered to meet with the IRS and comply with the summonses. As a means of compelling the Otts to comply with the orders of the court, the court hereby imposes the following schedule of fines against the respondent Otts: in the event that the Otts do not comply on or before November 5, 2004, thenceforth the Otts shall be fined in the amount of $1,000 per day. If after ten days, the Otts have still failed to comply, the Otts shall thenceforth be fined in the amount of $10,000 per day. If the total fines reach $50,000 and the Otts have still failed to comply, the court will promptly schedule and conduct a hearing relating to the coercive incarceration of the respondents.
IT IS ACCORDINGLY ORDERED this 22d day of October, 2004, that the government's Motion to Show Cause (Dkt. No. 11) and the government's Motion for Contempt (Dkt. No. 12) are granted as provided herein.