Opinion
CIVIL ACTION NO. 03-6194
March 4, 2004
FINDINGS OF FACT AND CONCLUSIONS OF LAW
The United States has brought an action to enforce a Summons issued by the Internal Revenue Service ("IRS") and served upon the defendant. After a hearing and a careful consideration of the parties' submissions, the Court makes the following findings of fact and conclusions of law.
FINDINGS OF FACT
1. On August 14, 2003, a Summons was served upon the defendant by Revenue Officer Lawrence M. Dolan ("Dolan"), directing the defendant to appear at the office of the Internal Revenue Service, 801 Old York Road, Jenkintown PA, on September 2, 2003.
2. The Summons required the defendant to testify and produce certain documents and records necessary to prepare a Collection Information Statement for the period August 1, 2002 to July 31, 2003, to collect tax liability for the years 1992 through 1998.
3. Although she did not appear at the appointed time and place, the defendant did appear on September 9, 2003.
4. When the defendant did appear, she did not provide the requested information and asserted her Fifth Amendment privilege in response to Dolan's questions.
5. The government is attempting to gather information to collect the defendant's tax liability for the years 1992 through 1998.
6. The investigation is being conducted for a legitimate purpose and the information sought may be relevant to that purpose.
7. The information sought is not presently in the government's possession.
8. The government has followed the administrative procedures required by the Internal Revenue Code.
9. The defendant has been the subject of an Internal Revenue Service criminal investigation for several years, from 1991 through 1999.
10. The information sought by the IRS could be used to trace the source of the defendant's assets and income which could be used in a criminal investigation and prosecution.
11. The defendant has a reasonable apprehension of danger that her answers to questions and her production of documents could lead to a criminal prosecution.
12. The information sought by the IRS may be obtained through sources other than the defendant.
13. Although the government can immunize the defendant from criminal prosecution as a result of pending information in response to the Summons, it refuses to do so.
CONCLUSIONS OF LAW
1. The IRS has authority to issue administrative summonses for the production of "books, papers, records, or other data" to determine the correctness of any return or the tax liability of any person. I.R.C. § 7602(a)(1).2. The district court has jurisdiction to enforce IRS summonses. I.R.C. §§ 7402(b) and 7604(a).
3. Summons enforcement proceedings are designed to determine whether the IRS has issued the summons for a proper purpose and in good faith. United States v. Rockwell International, 897 F.2d 1255, 1261 (3rd Cir. 1990).
4. The burden is on the government to make a prima facie showing that (1) the investigation will be conducted pursuant to a legitimate purpose, (2) the inquiry may be relevant to that purpose, (3) the information sought is not already within the Commissioner's possession, and (4) the administrative steps that the Code requires have been followed. United States v. Powell, 379 U.S. 48, 57-58 (1964).
5. The taxpayer must prove either that the government has not satisfied one of the elements of its prima facie case or that enforcement of the summons would be an abuse of the court's process.
6. Revenue Officer Lawrence M. Dolan was authorized to issue an administrative summons on August 12, 2003, to the defendant. 26 U.S.C. § 7602.
7. The defendant was served an attested copy of the administrative summons on August 14, 2003. 26 U.S.C. § 7603.
8. The investigation by the plaintiffs is for a legitimate purpose of collecting taxes due and the information sought under the terms of the administrative summons is relevant to this purpose.
9. The Fifth Amendment privilege is liberally construed in favor of the right. Hoffman v. United States, 341 U.S. 479 (1951).
10. In light of the criminal investigation of the defendant and her potential criminal liability, the defendant's apprehension of criminal prosecution and the use of the subpoenaed evidence against her in such a prosecution is not unreasonable. Maness v. Meyers, 419 U.S. 449 (1975).
11. Responding to the subpoena or explaining why she cannot respond "might be dangerous because injurious disclosure could result" to the defendant. See Hoffman v. United States, 341 U.S. 479, 486-87 (1951).
12. Considering the government's criminal investigation of the defendant and her exposure to criminal prosecution, the assertion of her Fifth Amendment privilege against self-incrimination to each of the revenue officer's questions is justified and is not a blanket invocation.