Source: https://supreme.justia.com/cases/federal/us/400/517/
Timestamp: 2019-04-20 02:49:22+00:00

Document:
1. Petitioner has no proprietary interest in the Acme records (his sole interest therein being that they presumably contain details of payments to him), and since he has no other protectable interest by way of privilege or otherwise, he has no absolute right under Fed.Rule Civ.Proc. 24(a)(2) to intervene in the IRS summons enforcement proceeding. Pp. 400 U. S. 527-531.
2. Under § 7602, an IRS summons may be used in connection with a tax investigation if (as in this case) it is issued in good faith and prior to a recommendation for prosecution. Pp. 400 U. S. 531-536.
BLACKMUN, J., delivered the opinion of the Court, in which BURGER C.J., and BLACK, HARLAN, STEWART, WHITE, and MARSHALL, JJ., joined. DOUGLAS, J., filed a concurring opinion, post, p. 400 U. S. 536. BRENNAN, J., filed a statement concurring in the result, post, p. 400 U. S. 536.
We are here concerned with problems arising in connection with the issuance and judicial enforcement of an internal revenue summons directed to someone other than the individual taxpayer.
Kevin L. Donaldson, formerly known as Merton H. Sweet, apparently was once employed by, or was a performer for, Acme Circus Operating Co., Inc., dba Clyde Beatty-Cole Bros. Circus. [Footnote 1] Mr. Donaldson (sometimes referred to herein as the "taxpayer") is an individual whose income tax returns for the calendar years 1964-1967, inclusive, are under investigation by the Internal Revenue Service.
issued and served separate summonses to Acme and to Joseph J. Mercurio, Acme's accountant, commanding their appearance before Grady on September 23 and 24 "to give testimony relating to the tax liability" of Donaldson and to produce certain of Acme's records having to do with the taxpayer. The records specified were "applications for employment and/or any other records containing background data including Social Security number furnished you by" the taxpayer; all contracts between the taxpayer and Acme and between him "and the various organizations sponsoring performances of the circus . . . during . . . 1964 through 1967, inclusive"; Forms 1099 and W-2 issued to the taxpayer; a schedule of the payments made to the taxpayer by the sponsoring organizations; checks and vouchers relating to payments to the taxpayer by Acme; expense vouchers submitted by the taxpayer; records containing information as to the identification of each sponsoring organization; and "correspondence or other records relating to the foregoing or to any other financial transactions between Acme" and the taxpayer during 1964-1967, inclusive.
restraining orders, and then, as to Mercurio, a preliminary injunction, restraining Mercurio and Acme from complying with Grady's requests or with any subsequent summons directing the production of the records "until such time as an order of a court of competent jurisdiction has been issued requiring such compliance." On November 25, 1968, the United States and Agent Grady, pursuant to 26 U.S.C. §§ 7402(b) and 7604(a), [Footnote 3] filed petitions with the same federal court for the judicial enforcement of the summonses directed to Mercurio and to Acme. The petitions were supported by affidavits of Grady and of Special Agent Bruce B. Miller. [Footnote 4] Each affidavit was to the effect that the affiant was conducting or assisting in the conduct of "an investigation for the purpose of ascertaining the correct income tax liability" of the taxpayer for the years 1964-1967, inclusive, and that it was "necessary" to examine the records and to take the testimony requested in order to ascertain the taxpayer's correct income tax liability for those years.
"for the express and sole purpose of obtaining evidence concerning any violations of the criminal statutes applicable to the tax laws of the United States;"
and that, as a consequence, the summonses were not issued for any purpose within the scope of § 7602. It was also asserted, although apparently it is not now urged here, that the requests in the summonses were overly broad and "without a showing of particularized relevancy," and that the taxpayer, under the Constitution, "is entitled to be secure in his personal papers and personal effects from unreasonable searches and seizures."
the records requested. The court then consolidated the two cases for purposes of appeal and granted stays pending appeal. The Fifth Circuit affirmed. United States v. Mercurio, 418 F.2d 1213 (CA5 1969).
Despite the contrary intimations in the motions to intervene, there is now no constitutional issue in the case. The taxpayer, on oral argument, so conceded. [Footnote 7] In any event, that question appears to have been settled long ago when the Court upheld, against Fourth Amendment challenge, an internal revenue summons issued under the Revenue Act of 1921 and directed to a third-party bank. First Nat. Bank v. United States, 267 U.S. 576 (1925), aff'g 295 F. 142, 143 (SD Ala.1924). See also United States v. First Nat. Bank, 274 F.Supp. 283, 284 (ED Ky.1967), aff'd sub nom. Justice v. United States, 390 U. S. 199 (1968), and United States v. Shlom, 420 F.2d 263, 266 (CA2 1969), cert. denied, 397 U.S. 1074 (1970).
from Mercurio and from Acme is the production of Acme's records, and not the records of the taxpayer. Further, as Judge Tuttle also emphasized, this is not a case where a summons has been issued to the taxpayer himself seeking access to his books and information from his mouth. Neither is it a case where the summons is directed at the taxpayer's records in the hands of his attorney or his accountant, with the attendant questions of privilege, or even in the hands of anyone with whom the taxpayer has a confidential relationship of any kind. Each of the summonses here, we repeat, was directed to a third person with respect to whom no established legal privilege, such as that of attorney and client, exists, and had to do with records in which the taxpayer has no proprietary interest of any kind, which are owned by the third person, which are in his hands, and which relate to the third person's business transactions with the taxpayer.
Mr. Justice Clark, in Part II of his opinion for a unanimous Court in Reisman, 375 U.S. at 375 U. S. 445-446, reviewed the statutory structure that Congress has provided for the issuance and enforcement of an internal revenue summons. It will perhaps be rewarding for us to outline that structure once again.
that, in § 3172, as amended, of the Revised Statutes of 1874.
"the purpose of ascertaining the correctness of any return . . . determining the liability of any person for any internal revenue tax . . . or collecting any such liability . . . [t]o summon the person liable for tax . . . or any person having possession, custody, or care of books of account containing entries relating to the business of the person liable for tax . . . or any other person the Secretary or his delegate may deem proper, to appear . . . and to produce such books, papers, records, or other data, and to give such testimony, under oath, as may be relevant or material to such inquiry. . . ."
Section 7603 provides for service of the summons. There is no provision for personal enforcement of the summons by the Secretary or his delegate. If enforcement is desired, he must proceed under § 7402(b), or its sister and essentially identical statute, § 7604(a), see n 3, supra, each of which grants the district courts of the United States jurisdiction "by appropriate process to compel such attendance, testimony, or production."
"Any enforcement action under this section [§ 7402(b)] would be an adversary proceeding affording a judicial determination of the challenges to the summons and giving complete protection to the witness. In such a proceeding, only a refusal to comply with an order of the district judge subjects the witness to contempt proceedings."
summons, that "the date fixed for appearance . . . shall not be less than 10 days from the date of the summons."
Thus, the summons is administratively issued, but its enforcement is only by federal court authority in "an adversary proceeding" affording the opportunity for challenge and "complete protection to the witness."
Reisman was an action, instituted by attorneys for a husband and wife, for declaratory and injunctive relief against the Commissioner of Internal Revenue and an accounting firm which had been working on the taxpayer-couple's financial records at their request. The Commissioner had issued summonses to the accounting firm for the production of work papers and correspondence. It was contended that the enforced production of the papers was an unlawful appropriation of the attorneys' work product and trial preparation. The Court concluded that the petitioner attorneys possessed an adequate remedy at law, and that the complaint, therefore, was subject to dismissal. In reaching this conclusion, the Court emphasized the employment of the accounting firm by the attorneys "to assist them in connection with certain civil and criminal tax proceedings arising from the alleged tax liability of the" taxpayers; that the products of the joint work of the accountants and the attorneys "were kept separate in the accounting firm's files and labeled as the property of" the attorneys; that, at the time of the service of the summonses, "there were four civil tax cases pending in the Tax Court contesting alleged deficiencies" and, in addition, "a criminal investigation of Mr. Bromley on the tax matters was in progress."
"in any of these procedures before either the district judge or United States Commissioner, the witness may challenge the summons on any appropriate ground."
"In addition, third parties might intervene to protect their interests, or, in the event the taxpayer is not a party to the summons before the hearing officer, he, too, may intervene,"
and that this "would be true whether the contempt be of a civil or criminal nature." Finally, it said that there would be no difference should the witness indicate "that he would voluntarily turn the papers over."
and that the administrative steps required by the Code have been followed. . . ."
Again it was emphasized that, at the adversary hearing to which the taxpayer is entitled before enforcement is ordered, he may challenge the summons on any appropriate ground. It was also stated that the burden of showing an abuse of the court's process is on the taxpayer.
With all this as background, our central inquiry here is as to Donaldson's right to intervene in the summons proceedings. Donaldson had obtained preliminary relief (in the form of a temporary restraining order and, as to Mercurio, in the form of the succeeding preliminary injunction as well) in his self-instituted actions to restrain Mercurio's and Acme's voluntary compliance with Grady's request. But when the enforcement proceedings were instituted by the United States and Grady, the taxpayer was not successful either as to intervention or as to relief by way of restraint.
practical matter impair or impede his ability to protect that interest,"
application of the rules in a summons proceeding. See 7 J. Moore, Federal Practice, ¦81.06, p. 4442 (2d ed.1970). This feature was recognized as purposeful by the Advisory Committee when the pertinent language was added to Rule 81(a)(3) in 1946. Id. at 81.01, p. 4413 (2d ed.1970). The post-Powell cases, too, are clearly and consistently to the effect that the footnote in Powell was not intended to impair a summary enforcement proceeding so long as the rights of the party summoned are protected and an adversary hearing, if requested, is made available. United States v. Gajewski, 419 F.2d 1088, 1090-1092 (CA8 1969), cert. denied, 397 U.S. 1040 (1970); Venn v. United States, 400 F.2d 207, 212 n. 12 (CA5 1968); McGarry's, Inc. v. Rose, 344 F.2d 416, 418 (CA1 1965). We agree with that conclusion.
Similarly, the Reisman language set forth in n 10, supra, does not guarantee intervention for the taxpayer. Certainly it recites that the proposed witness "or any interested party" may attack the summons before the hearing officer, as well as before the District Court in any ensuing enforcement proceeding, and certainly it recites that the party summoned and one "affected by a disclosure may appear or intervene" before the court. But this language, as well as subsequent comments in Reisman, [Footnote 12] is permissive only, and is not mandatory.
The language recognizes that the District Court, upon the customary showing, may allow the taxpayer to intervene. Two instances where intervention is appropriate were specified, namely, where "the material is sought for the improper purpose of obtaining evidence for use in a criminal prosecution" or where "it is protected by the attorney-client privilege." Thus, the Court recognized that intervention by a taxpayer in an enforcement proceeding might well be allowed when the circumstances are proper. But the Court did not there pronounce, even when confronted with a situation concerning an attorney's work product, that the taxpayer possesses an absolute right to intervene in any internal revenue summons proceeding. The usual process of balancing opposing equities is called for.
We, thus, are not in agreement with the holdings or implications in United States v. Benford, 406 F.2d 1192, 1194 (CA7 1969); United States v. Bank of Commerce, 405 F.2d 931 (CA3 1969); and Justice v. United States, 365 F.2d 312, 314 (CA6 1966), to the effect that, under Reisman, a taxpayer may intervene as of right simply because it is his tax liability that is the subject of the summons. Instead, we agree with the opposing conclusion reached by the Fifth Circuit here, 418 F.2d at 1218, and in In re Cole, 342 F.2d 5, 7-8 (CA2), cert. denied, 381 U.S. 950 (1965), and O'Donnell v. Sullivan, 364 F.2d 43, 44 (CA1), cert. denied, 385 U.S. 969 (1966).
large in his eyes -- lies in the fact that those records presumably contain details of Acme-to-Donaldson payments possessing significance for federal income tax purposes.
This asserted interest, however, is nothing more than a desire by Donaldson to counter and overcome Mercurio's and Acme's willingness, under summons, to comply and to produce records.
The nature of the "interest" urged by the taxpayer is apparent from the fact that the material in question (once we assume its relevance) would not be subject to suppression if the Government obtained it by other routine means, such as by Acme's independent and voluntary disclosure prior to summons, or by way of identifiable deductions in Acme's own income tax returns, or through Mercurio's appearance as a trial witness, or by subpoena of the records for trial. This interest cannot be the kind contemplated by Rule 24(a)(2) when it speaks in general terms of "an interest relating to the property or transaction which is the subject of the action." What is obviously meant there is a significantly protectable interest. And the taxpayer, to the extent that he has such a protectable interest, as, for example, by way of privilege, or to the extent he may claim abuse of process, may always assert that interest or that claim in due course at its proper place in any subsequent trial. Cf. United States v. Blue, 384 U. S. 251 (1966).
We therefore hold that the taxpayer's interest is not enough and is not of sufficient magnitude for us to conclude that he is to be allowed to intervene. Were we to hold otherwise, as he would have us do, we would unwarrantedly cast doubt upon and stultify the Service's every investigatory move.
This conclusion could dispose of the case, for our main concern here is with the taxpayer's asserted right to intervene in the particular enforcement proceedings.
Donaldson, however, strenuously urges, in addition, that an internal revenue summons proceeding may not be utilized at all in aid of an investigation that has the potentiality of resulting in a recommendation that a criminal prosecution be instituted against the taxpayer. He argues that a summons so used is invalid and unenforceable because it is outside the scope of § 7602. The Government naturally argues the contrary.
"[T]he witness may challenge the summons on any appropriate ground. This would include, as the circuits have held, the defenses that the material is sought for the improper purpose of obtaining evidence for use in a criminal prosecution, Boren v. Tucker, 239 F.2d 767, 772-773, as well as that it is protected by the attorney-client privilege. . . ."
as yet has been instituted. [Footnote 14] On the other hand, it has been said, usually citing Reisman, that, where the sole objective of the investigation is to obtain evidence for use in a criminal prosecution, the purpose is not a legitimate one and enforcement may be denied. [Footnote 15] This, of course, would likely be the case where a criminal prosecution has been instituted and is pending at the time of issuance of the summons.
It is precisely the latter situation -- where the sole object of the investigation is to gather data for criminal prosecution -- that is the subject of the Reisman dictum. This is evident from the fact that the dictum itself embraces the citation of Boren v. Tucker, 239 F.2d 767, 772-773 (CA9 1956), an opinion in which, at the pages cited, the Ninth Circuit very carefully distinguished United States v. O'Connor, 118 F.Supp. 248 (Mass.1953), a case where the taxpayer already was under indictment. The Reisman dictum is to be read in the light of its citation of Boren, and of Boren's own citation of O'Connor; when so read, the dictum comes into proper focus as applicable to the situation of a pending criminal charge or, at most, of an investigation solely for criminal purposes.
Grady's summonses were issued to Mercurio and to Acme, Donaldson was not under indictment, and, indeed, no recommendation had been made for his prosecution. That he might be indicted and prosecuted was only a possibility, no more and no less in his case than in the case of any other taxpayer whose income tax return is undergoing audit. Prosecution will necessarily depend on the result of that audit and on what the examination and investigation reveal.
Service, in a situation of suspected but undetermined fraud, to forgo either the use of the summons or the potentiality of an ultimate recommendation for.prosecution. We refuse to draw that line and thus to stultify enforcement of federal law. See United States v. Kordel, 397 U. S. 1, 397 U. S. 11 (1970).
We hold that under § 7602 an internal revenue summons may be issued in aid of an investigation if it is issued in good faith and prior to a recommendation for criminal prosecution.
MR. JUSTICE BRENNAN, believing that under the facts of this case petitioner has established no right to intervene, concurs in the result.
The record does not specifically support the fact of Donaldson's employment by, or performance for, Acme. In the context of the case, however, this is implied, and obviously the investigation is directed to the ascertainment of the fact.
"§ 7602. Examination of books and witnesses"
"For the purpose of ascertaining the correctness of any return, making a return where none has been made, determining the liability of any person for any internal revenue tax . . . or collecting any such liability, the Secretary or his delegate is authorized --"
"(2) To summon the person liable for tax . . . or any person having possession, custody, or care of books of account containing entries relating to the business of the person liable for tax . . . or any other person the Secretary or his delegate may deem proper, to appear before the Secretary or his delegate at a time and place named in the summons and to produce such books, papers, records, or other data, and to give such testimony, under oath, as may be relevant or material to such inquiry; and"
"(3) To take such testimony of the person concerned, under oath, as may be relevant or material to such inquiry "
"§ 7402. Jurisdiction of district courts"
"(b) To enforce summons. -- If any person is summoned under the internal revenue laws to appear, to testify, or to produce books, papers, or other data, the district court of the United States for the district in which such person resides or may be found shall have jurisdiction by appropriate process to compel such attendance, testimony, or production of books, papers, or other data."
"§ 7604. Enforcement of summons"
"(a) Jurisdiction of district court. -- If any person is summoned under the internal revenue laws to appear, to testify, or to produce books, papers, records, or other data, the United States district court for the district in which such person resides or is found shall have jurisdiction by appropriate process to compel such attendance, testimony, or production of books, papers, records, or other data."
Agent Grady worked from the Tampa District Office of the Internal Revenue Service, and Agent Miller from the New Orleans District Office. The taxpayer had a New Orleans address; Mercurio and Acme possessed Florida addresses.
Mercurio and Acme are not active parties to the present review. They advise the Court that they are "ready to follow the orders of the court, and are nominal parties only."
Compare the Fifth Circuit's holding in the present case; In re Cole, 342 F.2d 5 (CA2), cert. denied, 381 U.S. 950 (1965); and O'Donnell v. Sullivan, 364 F.2d 43, 44 (CA1 1966), with United States v. Benford, 406 F.2d 1192 (CA7 1969); United States v. Bank of Commerce, 405 F.2d 931 (CA3 1969); and Justice v. United States, 365 F.2d 312 (CA6 1966).
Tr. of Oral Arg. 9-10.
"(a) INTERVENTION OF RIGHT. Upon timely application anyone shall be permitted to intervene in an action: . . . (2) when the applicant claims an interest relating to the property or transaction which is the subject of the action and he is so situated that the disposition of the action may, as a practical matter, impair or impede his ability to protect that interest, unless the applicant's interest is adequately represented by existing parties."
"Because § 7604(a) contains no provision specifying the procedure to be followed in invoking the court's jurisdiction, the Federal Rules of Civil Procedure apply. . . . The proceedings are instituted by filing a complaint, followed by answer and hearing. . . ."
"However, the Government concedes that a witness or any interested party may attack the summons before the hearing officer. There are cases among the circuits which hold that both parties summoned and those affected by a disclosure may appear or intervene before the District Court and challenge the summons by asserting their constitutional or other claims. . . . We agree with that view, and see no reason why the same rule would not apply before the hearing officer."
"Rule 81. APPLICABILITY IN GENERAL"
"(a) TO WHAT PROCEEDINGS APPLICABLE."
"(3) . . . These rules apply . . . to proceedings to compel the giving of testimony or production of documents in accordance with a subpoena issued by an officer or agency of the United States under any statute of the United States except as otherwise provided by statute or by rules of the district court or by order of the court in the proceedings."
"Furthermore, we hold that, in any of these procedures before either the district judge or United States Commissioner, the witness may challenge the summons on any appropriate ground. This would include, as the circuits have held, the defenses that the material is sought for the improper purpose of obtaining evidence for use in a criminal prosecution . . . as well as that it is protected by the attorney-client privilege. . . . In addition, third parties might intervene to protect their interests, or in the event the taxpayer is not a party to the summons before the hearing officer, he, too, may intervene."
375 U.S. at 375 U. S. 449.
Wild v. United States, 362 F.2d 206, 209 (CA9 1966); McGarry v. Riley, 363 F.2d 421, 424 (CA1), cert. denied, 385 U.S. 969 (1966); Venn v. United States, 400 F.2d 207, 210 (CA5 1968); Sanford v. United States, 358 F.2d 685, 686 (CA5 1966); United States v. Hayes, 408 F.2d 932, 936 (CA7), cert. denied, 396 U.S. 835 (1969); United States v. Giordano, 419 F.2d 564, 568 (CA8 1969), cert. denied, 397 U.S. 1037 (1970); United States v. Chikata, 427 F.2d 385, 390 (CA9 1970); United States v. DeGrosa, 405 F.2d 926, 928 (CA3), cert. denied sub nom. Zudick v. United States, 394 U.S. 973 (1969); see United States v. First Nat. Bank, 274 F.Supp. 283, 285 (ED Ky.1967), aff'd sub nom. Justice v. United States, 390 U. S. 199 (1968).
United States v. Erdner, 422 F.2d 835, 836 (CA3 1970); United States v. Michigan Bell Tel. Co., 415 F.2d 1284, 1286 (CA6 1969); Howfield, Inc. v. United States, 409 F.2d 694, 697 (CA9 1969); United States v. Ruggeiro, 425 F.2d 1069, 1070 (CA9 1970), petition for certiorari pending sub nom. Kyriaco v. United States, No. 448, O.T. 1970.
Wild v. United States, 362 F.2d at 208-209; Venn v. United States, 400 F.2d at 210; United States v. Roundtree, 420 F.2d 845, 851 (CA5 1969). See United States v. O'Connor, 118 F.Supp. 248 (Mas.1953).
"§ 7801. Authority of Department of the Treasury"
"(a) Powers and duties of Secretary. -- Except as otherwise expressly provided by law, the administration and enforcement of this title shall be performed by or under the supervision of the Secretary of the Treasury."
In 1969, 2,080 full-scale tax fraud investigations were undertaken by the intelligence divisions. Only 1,049, or approximately half, of these resulted in recommendations for prosecution. In the 1,031 cases not recommended for prosecution, some $20,000,000 in deficiencies and penalties resulted and were earmarked for collection civilly. 1969 Annual Report of the Commissioner of Internal Revenue 28-31.
by this Court. As yet there has been no hearing before the special agent, and this Court rules only that such a hearing may proceed on the summonses issued.
On these facts, I concur with the Court's decision. There is nothing in the language of § 7602 to limit the issuance of summonses to civil investigations. Therefore, even though petitioner is the subject of a criminal investigation, that is no bar to the issuance of the summonses. It is true that a person who is summoned may object that the production of records or testifying would violate his rights under the Fourth or Fifth Amendments. And a taxpayer would clearly have standing to raise a claim of violation of his constitutional rights if a third party were ordered to produce records belonging to the taxpayer. United States v. Kordel, 397 U. S. 1, 397 U. S. 7; Reisman v. Caplin, 375 U. S. 440, 375 U. S. 445. But it is difficult to see how the summoning of a third party, and the records of a third party, can violate the rights of the taxpayer, even if a criminal prosecution is contemplated or in progress. There is no right to be free from incrimination by the records or testimony of others.
"investigations," the summoned party may or may not be put under oath, at the discretion of the agent. He does have the right to be accompanied by counsel or an accountant. But the Internal Revenue Service has taken the position that the taxpayer who is being investigated is not entitled to be present at such "ex parte investigations." [Footnote 2/2] Moreover, he normally is not given notice of the issuance of the summons to the third party. Our decisions, however, make clear that the taxpayer has the right to be present at the hearing and to confront and cross-examine witnesses and inspect evidence against him.
officers of the state seriously to abuse or deceive a witness in the presence of the grand jury. Similarly the presence of the jurors offers a substantial safeguard against the officers' misrepresentation, unintentional or otherwise, of the witness' statements and conduct before the grand jury. The witness can call on the grand jurors if need be for their normally unbiased testimony as to what occurred before them."
"[T]he Fire Marshal's interrogation is, and apparently was intended to be, an important and integral part in the prosecution of the persons for arson or a similar crime. The rights of a person who is examined in connection with such crimes should not be destroyed merely because the inquiry is given the euphonious label 'administrative.'"
352 U.S. at 352 U. S. 346-347, 349.
In Anonymous v. Baker, 360 U. S. 287, another five-to-four decision, the Court upheld the power of a judge in New York, acting as a one-man grand jury, to interrogate a witness without benefit of counsel, again relying on the distinction between investigation and prosecution. Id. at 360 U. S. 294. MR. JUSTICE BLACK again stated the correct view in his dissent that this procedure allowed a state official to lay the groundwork for a future prosecution without the protection of the presence of counsel.
for approval of the procedures adopted by the Internal Revenue Service.
"There is . . . only one way the Chief Executive may move against a person accused of a crime and deny him the right of confrontation and cross-examination and that is by the grand jury."
363 U.S. at 363 U. S. 497.
"[The grand jury is] the only accusatory body in the Federal Government that is recognized by the Constitution. I would allow no other engine of government, either executive or legislative, to take [its] place at least when the right of confrontation and cross-examination are denied the accused as is done in these cases."
In Jenkins v. McKeithen, 395 U. S. 411, the Court dealt with another state investigative commission. There, however, the authority of the commission was limited to ascertaining facts regarding violations of criminal law and reporting its findings for criminal prosecution. There was no right to cross-examination for nonwitnesses, and the right was limited for witnesses. The Court held that the commission exercised an accusatory function, and was empowered to brand people as criminals. Id. at 395 U. S. 427-428. Therefore, due process required the commission to afford a person being investigated the right to confront and cross-examine the witnesses against him.
Given the identity of purpose of the investigations in Jenkins and this case, the rule of Jenkins clearly applies to the taxpayer in this suit. The requirements of procedural due process do not become more lax when federal, rather than state, criminal investigations are involved.
result will be a determination of whether to bring criminal charges. The special agent will perform the function traditionally reserved to the grand jury in our Federal Government. The teaching of the Jenkins case is that such a proceeding may not be held without affording the taxpayer an opportunity to attend, to cross-examine, and to rebut.
Though the Solicitor General argues that an investigation by a special agent might have civil as well as criminal results, and the final decision to prosecute is not made until after an investigation, and approval by a regional counsel, he admits that the special agent is only assigned to the case "as a result of some allegation or indication of criminal conduct." Indeed, the Intelligence Division "enforces the criminal statutes . . . by developing information concerning alleged criminal violations thereof. . . ." Internal Revenue Service Organization and Functions § 1118.6, 35 Fed.Reg. 2454.
An exception is made where the taxpayer asserts a privileged relationship with the person summoned, such as attorney-client.

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