Opinion ID: 478417
Heading Depth: 2
Heading Rank: 3

Heading: Violation of 26 U.S.C. Sec. 6103(h)

Text: 22 Whether a federal statute provides a particular remedy is a question of law reviewable de novo. See United States v. Frazin, 780 F.2d 1461, 1464-1465 (9th Cir.1986); United States v. McConney, 728 F.2d 1195, 1201 (9th Cir.1984) (en banc), cert. denied, 469 U.S. 824, 105 S.Ct. 101, 83 L.Ed.2d 46 (1984). Whether the trial court erred in refusing to impose sanctions for a statutory violation under its supervisory power is reviewed for an abuse of discretion. United States v. Roberts, 779 F.2d 565, 568-569 (9th Cir.1986); United States v. Noti, 731 F.2d 610, 612 (9th Cir.1984). 23 Michaelian contends that the IRS violated the confidentiality requirement of 26 U.S.C. Sec. 6103(h) 2 by disclosing his tax return to the Department of Justice (DOJ) in October of 1982, several months before a grand jury investigation of Michaelian was authorized under 26 U.S.C. Sec. 7602. 3 The disclosure occurred pursuant to IRS procedure which requires search warrants to be reviewed and approved by both IRS and DOJ lawyers. Michaelian reads 26 U.S.C. Sec. 6103(h)(3) to require referral of a case by the Secretary of the Treasury, pursuant to 26 U.S.C. Sec. 7602, to the DOJ for grand jury investigation or prosecution before disclosure of tax return information may occur. Although apparently no court has held that dismissal or suppression is an appropriate remedy for Sec. 6103 violation, Michaelian contends that those remedies are the only ones adequate to serve the statute's purpose. We disagree. 24 It is clear that Congress specifically provided criminal penalties for unauthorized disclosure of tax return information in violation of Sec. 6103. See 26 U.S.C. Sec. 7213, 18 U.S.C. Sec. 1905; United States v. Chemical Bank, 593 F.2d 451, 457 (2d Cir.1979). This Court has previously demonstrated its reluctance to imply a judicial remedy for violations of Sec. 6103 given Congress' explicit provision of a remedy. See United States v. Claiborne, 765 F.2d 784, 793 (9th Cir.1985) (Sec. 6103(i)), cert. denied, --- U.S. ---, 106 S.Ct. 1636, 90 L.Ed.2d 182 (1986). Cf. United States v. Frazin, 780 F.2d 1461, 1466 (9th Cir.1986) (Financial Right to Privacy Act provided for civil penalties). Other circuits have reached similar conclusions. See, e.g., Marvin v. United States, 732 F.2d 669, 673 (8th Cir.1984); United States v. Barnes, 604 F.2d 121, 146 (2d Cir.1979), cert. denied, 446 U.S. 907, 100 S.Ct. 1833, 64 L.Ed.2d 260 (1980). Indeed, no court has held that a Sec. 6103 violation warrants dismissal or suppression. 25 The Second Circuit has suggested in dictum that suppression might be available for a Sec. 6103 violation, see United States v. Chemical Bank, 593 F.2d 451, 458 (2d Cir.1979), and one U.S. District Court has relied upon the Chemical Bank dictum in setting aside portions of an affidavit which relied on unauthorized disclosure in violation of Sec. 6103, see United States v. Lavin, 604 F.Supp. 350, 356 (E.D.Pa.1985). The Lavin case involved a warrant unrelated to tax administration, however; the illegal disclosure of tax information supported a warrant for narcotics evidence. Lavin relied upon the fact that disclosure was not made in a tax administration matter, as required by Sec. 6103(h), and thus required a court order under Sec. 6103(i)(1)(B). See id. Moreover, Lavin relies solely upon Chemical Bank's dictum and omits discussion of other, then-existing contrary authority such as Marvin and Barnes. Here, tax administration is at issue and thus Sec. 6103(h)(2) applies, instead of Sec. 6103(i)(1)(B) as applied in Lavin. Other authorities cited by Michaelian discuss dismissal as a remedy for violation of other tax statutes which do not embody legislatively created remedies, and involve bad faith and flagrant government overreaching not present in this case, see United States v. Dahlstrum, 493 F.Supp. 966, 975 (C.D.Cal.1980, Hauk, J.) (Sec. 7203); United States v. Weiss, 566 F.Supp. 1452 (C.D.Cal.1983, Hauk, J.) (same). 26 The district court did not abuse its discretion in refusing to fashion a dismissal or suppression remedy for a violation of Sec. 6103. Given this conclusion, we do not reach the question of whether any violation of Sec. 6103 occurred.