Court Opinion

ID: 9448952
Source: CourtListenerOpinion
Date Created: 2023-08-03 23:50:48.330708+00
Date Added: 2024-06-11T17:31:37.516685
License: Public Domain

LUMBARD, Chief Judge
(concurring) .
I concur with my brothers in affirming the ruling below and in their resolution of the substantive issues presented on this appeal. Because I am troubled by the growing practice of attempting to impede tax investigations by a series of oppositions to the government’s subpoenas, I deem it advisable to state my views regarding the standing of these appellants to raise the objections which they assert.
The corporation objects to enforcement of the summons served on it on the following grounds:
“1. Enforcement of the summons is sought for a purpose outside the scope of the statute authorizing the use of the summons;
“2. Enforcement of the summonses [sic] would permit pretrial discovery in violation of the Federal Rules of Criminal Procedure ;
“3. Inspection of the corporation books would violate the provisions of the Internal Revenue Code regulating such inspections;
“4. The description of the documents in the summons lacks reasonable certainty and the documents described are not material and relevant to the inquiry.”
Brief for Appellants, pp. 3-4. The taxpayer objects to enforcement of the summons served on the accountants only on the first two grounds stated. Since each appellant has standing to assert only those objections which affect rights personal to it or him, I would hold that the corporation has standing to raise grounds (1), (3), and (4), above, and that the taxpayer has standing to raise only ground (2).
It is, of course, appropriate for a party served with a summons of the Internal Revenue Service pursuant to § 7602 of the Internal Revenue Code to object to its enforcement on the ground that the Service has exceeded its statutory authority; the Service has only *18that power which the statute confers. See Foster v. United States, 265 F.2d 183, 187 (2 Cir.), cert. denied, 360 U.S. 912, 79 S.Ct. 1297, 3 L.Ed.2d 1261 (1959); Hubner v. Tucker, 245 F.2d 35, 39 (9 Cir. 1957). Since the first objection asserts that the summons served on the corporation exceeds the authority conferred by § 7602, and the third asserts that the summons disregards the limitation on that authority expressed in § 7605(b) of the Code, the corporation has standing to raise both of those objections. It is also proper for the corporation to raise the fourth objection, which pertains to claimed rights of the corporation itself. As we said at an earlier stage of this protracted litigation, third parties who become involved in tax investigations of another “have the protection always accorded to them by the courts which limit burdensome subpoenas, restrict them to relevant material and refuse to permit unwarranted searches and seizures.” Application of Magnus, 299 F.2d 335, 337 (2 Cir.), cert. denied, 370 U.S. 918, 82 S.Ct. 1556, 8 L.Ed.2d 499 (1962) 1
The second ground for objection raises essentially the same issues as the first, inasmuch as it asserts in effect that the purpose for which enforcement is sought lies without the statutory authorization. But the right on which it focuses is the right of the taxpayer to be free of pre-trial discovery by the government beyond that allowed by Rule 17 of the Federal Rules of Criminal Procedure. The corporation has no stake in the conduct of the criminal prosecution against the taxpayer, and lacks standing to protest against a violation of his rights. Compare cases in which the taxpayer has been denied standing to assert the rights of a third person. Eg., Application of Magnus, supra; Foster v. United States, supra.
The taxpayer has no standing to object to enforcement of the summons served on the accountants on the first ground above. We have already held that a taxpayer may not assert the constitutional rights of another sought to be examined in connection with the former’s tax liability. Foster, supra, 265 F.2d at 187-188. That ruling is applicable here, where the taxpayer claims that a third-party summons is unauthorized by statute. He does, however, have the immediate, personal interest necessary for standing to raise the objection that enforcement of the summons against the accountants will constitute improper pre-trial discovery in the criminal action now pending against him. Compare my concurring opinion in Foster, supra, at 189.
Ordinarily, a summons “is personal to the person to whom it is directed and strangers have no standing either to substitute themselves for the person to whom it is directed, or to quash it.” Albachten v. Corbett, 156 F.Supp. 863, 864 (S.D.Cal.1957). And, as in this case with respect to the summons served on the corporation, the person summoned can, if he chooses, make an indicted taxpayer’s objection for him in the form of the first objection above. This was the procedure used in Application of Myers, 202 F.Supp. 212 (E.D.Pa.1962), and United States v. O’Connor, 118 F.Supp. 248 (D.Mass.1953). But if the person summoned chooses not to contest enforcement, a taxpayer’s rights in a pending criminal action might go unprotected unless he is permitted to assert them in the enforcement proceedings. The rules of standing are not so rigid that a court whose authority is sought in aid of a summons must keep its doors closed to the taxpayer in such a situation. Neither the taxpayer nor the government would be well served by postponing until trial a hearing of the claim that pretrial discovery violated the Federal Rules of Criminal Procedure; at that stage it might be very difficult to unravel properly obtained evidence from that which, di*19rectly or indirectly, was obtained by allegedly unauthorized means. At least in cases like the present, where the objection is not otherwise raised, a taxpayer who has already been indicted should be permitted to object to enforcement of a third-party summons on the ground that enforcement would permit the government to make unauthorized pre-trial discovery in the criminal proceeding pending against him. The question whether, in a case where the third person asserts the objection, the taxpayer must be permitted to intervene or can be kept out or confined to presenting his views as amicus curiae is not raised by this appeal.2
Since in my view one or the other of the appellants has standing to raise each of the objections set out above, it is appropriate for me to record my concurrence on the merits.

. Cases in which the taxpayer was not permitted to object on such grounds to the enforcement of a summons served on a third person, e. g., Foster v. United States, supra, are inapposite.

. In United States v. O’Connor, supra, the third person did raise the objection. Judge Wyzanski denied the taxpayer the right to intervene but allowed him to. present his views by counsel as amicus. curiae.