Opinion
5050-19
02-04-2022
ERIC MAURICE PINCKNEY, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
Richard T. Morrison Judge
Background
At last week's trial, respondent called petitioner as a witness. In response to some of respondent's questions, petitioner invoked his Fifth Amendment privilege not to be forced to incriminate himself. The Court overruled petitioner's objections. The Court ordered petitioner to answer the questions. Petitioner refused to answer the questions even though ordered to do so. Respondent asked the Court to draw adverse inferences from each of petitioner's refusals to answer. The Court reserved ruling on respondent's requests. At the conclusion of trial, respondent asked the Court to make such rulings.
Discussion
In this proceeding, the Court serves two roles: (1) it serves as the factfinder and (2) it resolves legal questions. These dual roles of the Court are relevant to how the Court should resolve respondent's requests that the Court draw adverse inferences from petitioner's refusals to answer questions. For the purpose of discussion, here are three potential resolutions of the requests:
1. The law does not permit the Court to draw adverse inferences from any of petitioner's refusals to answer.
2. For any particular refusal to answer, the Court in its factfinding role is permitted (but not required) to draw an adverse inference from a particular refusal to answer.
3. For some particular refusals to answer, the Court in its factfinding role is permitted (but not required) to draw an adverse inference. For other
particular refusals to answer, the law does not permit the Court to draw an adverse inference.
To give concrete examples of the three possible resolutions stated above, the Court makes the following observations:
Resolution (1). In Carter v. Kentucky, 450 U.S. 288 (1981), the Supreme Court held that the District Court in a criminal case should have instructed the jury not to draw adverse inferences from the defendant's invocation of the privilege against self-incrimination.
Resolution (2). In U.S. ex. rel. DRC, Inc. v. Customer Battles, LLC, 415 F.Supp.2d 628 (E.D. Va. 2006), the District Court held that a jury was "permitted, but not required" to draw an adverse inference from a party's invocation of the self-incrimination privilege in response to certain questions asked in discovery. In People v. Lopez, 84 Cal.Rptr.2d 655 (4th Dist., Div. 3 1999), the court stated that "where a witness has no constitutional or statutory right to refuse to testify * * * [j]urors are entitled to draw a negative inference when such a witness refuses to provide relevant testimony."
Resolution (3). In Dellacroce v. Commissioner, 83 T.C. 269, 277 (1984), a taxpayer invoked the self-incrimination privilege in response to the Commissioner's questions. The Court did not determine that the assertion of the privilege was invalid. Id. at 279. The Court held that even though it was permitted in some circumstances to draw an adverse inference from the invocation of the self-incrimination privilege, such an adverse inference may not be made when there is no other evidence to support the fact to be inferred. Id. at 286.
The above precedents are cited by the Court to illustrate some of the potential resolutions of the reserved rulings. The Court does not imply that these precedents suggest which of the potential resolutions is appropriate.
The Court desires the parties' written views on whether it should make adverse inferences from petitioner's refusals to answer. The parties should explain their views on this matter as part of their briefs. For example, each party should explain (1) if, in their view, the Court is permitted to make adverse inferences and (2) if it is, whether the Court should do so.
Cautionary notes regarding briefs
The parties must follow Tax Court Rule of Practice & Procedure 151 in submitting their briefs and must follow the briefing schedule set forth by the Court at the conclusion of trial. The parties' briefs must state their proposed findings of fact. Rule 151(e)(3). They must necessarily do so before knowing whether the Court will make adverse inferences from petitioner's refusals to answer.
The parties' briefs should not be confined to the matter of adverse inferences. The briefs should cover all the outstanding issues in the entire case.
Conclusion
It is therefore
ORDERED that the rulings regarding the drawing of adverse inferences from petitioner's refusals to testify are still reserved.