Court Opinion

ID: 8914103
Source: CourtListenerOpinion
Date Created: 2022-11-27 04:16:43.042848+00
Date Added: 2024-06-11T17:08:48.725731
License: Public Domain

McKAY, Circuit Judge,
concurring in
part and dissenting in part.
The principal obstacle to a unanimous court in United States v. LaSalle National Bank, 437 U.S. 298, 98 S.Ct. 2357, 57 L.Ed.2d 221 (1978), was the majority’s implicit recognition that a fully prophylactic rule defining the line between legitimate and illegitimate exercise of civil investigative authority would tempt overmuch the tax man to dissemble, if not downright manipulate and lie, thereby making the court an unwitting collaborator in the practice of abusing the civil process to obtain criminal prosecutorial ends. The essence of what the dissent found objectionable in the majority opinion is found in the majority’s statement:
[wjithout doubt, this burden is a heavy one. Because criminal and civil fraud liabilities are coterminous, the Service rarely will be found to have acted in bad faith by pursuing the former. On the other hand, we cannot abandon this aspect of the good-faith inquiry altogether. We shall not countenance delay in submitting a recommendation to the Justice Department when there is an institutional commitment to make the referral and the Service merely would like to gather additional evidence for the prosecution. Such a delay would be tantamount to the use of the summons authority after the recommendation and would permit the Government to expand its criminal discovery rights. Similarly, the good-faith standard will not permit the IRS to become an information-gathering agency for other departments, including the Department of Justice, regardless of the status of criminal cases.
437 U.S. at 316-17, 98 S.Ct. at 2367-2368 (1977) (footnotes omitted).
*854The dissent found the effects of discovery (obviously made relevant by the majority opinion) fraught with potential for unjustified delay. The majority had no occasion to catalog for us the details of how to strike the balance between the tax man’s temptation to dissemble and the taxpayer’s temptation to delay. By permitting most of the taxpayer’s permissible discovery to be delayed until the one hearing which must be held anyway, the principal device for preventing unreasonable delay already has been implemented. United States v. Harris, 628 F.2d 875 (5th Cir. 1980). At that time and place, I would err more on the side of requiring the tax man to disclose the fact of contact with law enforcement agencies than on the side of permitting him to withhold that information. Disclosing that there has been contact between criminal authorities and civil tax collectors is more likely to compromise legitimate criminal purposes in the imagination than in fact. The frequency and time sequence in which those contacts have been made, together with information already revealed, gives a fairer opportunity to discern whether the court should go further in checking the possibility of dissembling.
It is a constant source of amazement that court opinions so frequently reflect an overriding suspicion that taxpayers will use discovery or other proper legal processes for illegitimate purposes, while at the same time tacitly assuming that no great risk exists that tax collectors will abuse civil process to advance criminal prosecutions of all kinds. What is at stake here is some kind of equilibrium. We have already approved confining discovery to the hearing, severely restricting the application of rules written on their face to apply equally to these as to other matters, and otherwise narrowing the scope of the taxpayer’s examination into the legitimacy of the discovery purposes of the IRS. Even the slightest experience in trial practice teaches that conclusory questions rarely help the opposing party to uncover illegitimacy. Hard facts which can be assembled into a construct and examined for consistency and implications are the only really useful discovery tools. Use of civil discovery to circumvent well-settled restrictions on discovery for criminal purposes is one of the illegitimate purposes which the taxpayer has a right to test for himself without relying on self-discipline of the IRS any more than it relies on his self-discipline. Under existing authority, the restrictions are already so extreme as to make the burden almost impossible. The rules appear to invite circumvention.
The beginning place for some modicum of balance is to permit the taxpayer to bring to the court’s attention the times and frequency of contacts between civil IRS agents and those whose functions are criminal in nature. The chance that the disclosure of the fact of those contacts and their time sequence will unreasonably compromise legitimate criminal investigations is remote to the point of fancy. On the other hand, the very fact of such contacts raises an implication of entanglement of purposes. It is for the trial court, once the frequency and time of contacts is established along with other evidence, to determine whether it should examine in camera, or otherwise, the details of those communications.
Viewed in this context, the answers to questions 10, 11 and 12, except for the substance of the information exchanged during interagency contacts, are both relevant to an inquiry concerning legitimacy and harmless to any legitimate governmental expectation. The trial court should be directed to order the answers to these questions. As to the balance of the overruled questions, as well as the timing of discovery, I am in agreement with the majority’s conclusions.