Court Opinion

ID: 2963636
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:13:21.424874+00
Date Added: 2024-06-11T11:42:44.135072
License: Public Domain

USCA1 Opinion

	

          September 27, 1995
                            UNITED STATES COURT OF APPEALS
                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT
                                FOR THE FIRST CIRCUIT

                              _________________________

          No. 95-1277

                              UNITED STATES OF AMERICA,
                                Petitioner, Appellant,

                                          v.

                             NANCY GERTNER, ETC., ET AL.,
                               Respondents, Appellees.

                              _________________________

                                      JOHN DOE,
                                Intervenor, Appellee.

                              _________________________

                                     ERRATA SHEET
                                     ERRATA SHEET

               The opinion of this  court issued on September 13,  1995, is
          corrected as follows:

               On page 18, note 7, line 3   change "he" to "the"

                            UNITED STATES COURT OF APPEALS
                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT
                                FOR THE FIRST CIRCUIT
                              _________________________

          No.  95-1277

                              UNITED STATES OF AMERICA,
                                Petitioner, Appellant,

                                          v.

                             NANCY GERTNER, ETC., ET AL.,
                               Respondents, Appellees.
                                 ____________________

                                      JOHN DOE,
                                Intervenor, Appellee.
                                 ____________________

                    APPEAL FROM THE UNITED STATES DISTRICT COURT 
                          FOR THE DISTRICT OF MASSACHUSETTS

                    [Hon. Morton A. Brody,* U. S. District Judge]
                                            ____________________
                                 ____________________

                                        Before

                          Selya and Boudin, Circuit Judges,
                                            ______________

                             and Lisi,** District Judge.
                                         ______________
                                 ____________________

               John A. Dudeck,  Jr., Attorney, Tax Division, U.S.  Dep't of
               ____________________
          Justice,  with   whom  Loretta  C.  Argrett,  Assistant  Attorney
                                 ____________________
          General, Gary R.  Allen and Charles E.  Brookhart, Attorneys, Tax
                   ______________     _____________________
          Division, were on brief, for appellant.
               Gerald B. Lefcourt,  with whom Sheryl  E. Reich, Lefcourt  &
               __________________             ________________  ___________
          Dratel, P.C.,  Bruce Maffeo, Bernstein & Maffeo, Thomas E. Dwyer,
          ____________   ____________  __________________  ________________
          Jr., Jody L. Newman, and Dwyer & Collora were on joint brief, for
          ___  ______________      _______________
          appellees.
               Judith  H. Mizner,  Andrew Good,  Benjamin Fierro,  III, and
               _________________   ___________   _____________________
          Francis S. Moran, Jr.  on joint brief for Massachusetts  Ass'n of
          _____________________
          Criminal Defense Lawyers, Massachusetts Bar Ass'n, and Boston Bar
          Ass'n, amici curiae.
                                 ____________________

                                  September 13, 1995
                                 ____________________

          ____________________
           *Of the District of Maine, sitting by designation.
          **Of the District of Rhode Island, sitting by designation.

                    SELYA,  Circuit Judge.   This  controversy features  an
                    SELYA,  Circuit Judge.
                            _____________

          old-fashioned  tug of  war.   Pulling  in  one direction  is  the

          Internal Revenue Service  (IRS) which, for easily  understandable

          reasons,  is intent on learning  the identity of  persons who pay

          large legal fees in cash.  Pulling in the opposite direction is a

          consortium consisting  of two lawyers and  three bar associations

          (appearing  as amici  curiae) which,  for  equally understandable

          reasons   (fearing   inter   alia  that   disclosure   may   spur
                               _____   ____

          prosecution), is  intent on safeguarding the  identity of clients

          who pay in cash.  In  this case, the parties' positions  hardened

          and a stalemate  developed.  The district  court resolved matters

          in the lawyers' favor, refusing to enforce IRS summonses designed

          to obtain "client identity" information pursuant to section 6050I

          of the Internal Revenue Code (I.R.C.), 26 U.S.C.    6050I (1988 &

          Supp. V  1993).  See United  States v. Gertner, 873  F. Supp. 729
                           ___ ______________    _______

          (D. Mass. 1995).   The government appeals.  We  affirm (albeit on

          more  circumscribed grounds  than those  enumerated by  the lower

          court).

          I.  BACKGROUND
          I.  BACKGROUND

                    Federal  law,  specifically  I.R.C.     6050I  and  its

          implementing  regulations, requires  a person  who  receives more

          than   $10,000  in  cash  during   a  single  trade  or  business

          transaction  to file a form  (IRS Form 8300)  reporting the name,

          address,  occupation, and  social security  number of  the payor,

          along with the date and nature of the  transaction and the amount

          involved.  See I.R.C.    6050I; 26 C.F.R.    1.6050I-1(e) (1995).
                     ___

                                          3

          At  various times in 1991 and 1992, respondents Nancy Gertner and

          Jody  Newman, then  partners in  a Boston  law firm,  filed forms

          reflecting four  successive payments of  hefty cash  fees to  the

          firm by  a single  client.   Each  of the  forms was  essentially

          complete  except for  the name  of the  client.   The respondents

          advised the  IRS that they were withholding the client's identity

          on the basis of  ethical obligations, attorney-client  privilege,

          and specified constitutional protections.

                    These   filings    sparked   a   lengthy    course   of

          correspondence  between  the  law firm  and  the  IRS.   In  that

          exchange,  members  of  the  firm attempted  on  at  least  three

          occasions  to  determine  whether  the  IRS  wanted  the  omitted

          information as part of an investigation focused on the firm or to

          learn more  about the unnamed client.   The IRS did  not deign to

          answer these inquiries.

                    The  parties remained  deadlocked  and  the IRS  issued

          summonses purporting to direct the respondents to furnish certain

          records  and   testimony  anent  the  client's   identity.    The

          respondents declined  to comply.  The government  then brought an

          enforcement  action  pursuant to  I.R.C.      7402(a) &  7604(a),

          claiming that  it wanted the  information in  connection with  an

          investigation  of the  law firm's  tax liability.   On  April 20,

          1994, after perusing the complaint and the declaration of Revenue

          Agent Sophia  Ameno, the district court issued an order directing

          the respondents to show cause why they should not be compelled to

          honor the summonses.

                                          4

                    The   court   permitted   the   client   to   intervene

          pseudonymously.   Thereafter, the respondents and  the intervenor

          mounted two lines of  defense.  First, they asseverated  that the

          IRS's  alleged investigation of the  lawyers was merely a pretext

          disguising  its real objective   learning more about the client  

          and that  the government therefore  should be required  to follow

          the   statutory   procedure  for   issuing   summonses  affecting

          unidentified third parties.1   See I.R.C.   7609(f).   Second, in
                                         ___

          concert with the amici they  insisted that various privileges and

          protections allow lawyers to  shield their client's identity from

          the reach of  such summonses.   The IRS  joined issue,  asserting

          that  it  had  employed   the  appropriate  procedure;  that  the

          respondents  had   failed  to  show  either   that  the  supposed

          investigation  of the law  firm was  a sham  or that  an improper

          motive  tainted  the summonses;  and,  finally,  that no  special

          protection of any kind attached to the desired information.

                    When the day of  decision dawned, the respondents asked

          the  district  court to  take  live  testimony.   The  government

          opposed the request.  The court eschewed the evidentiary  hearing

          that the  respondents sought but nevertheless  refused to enforce
                              
          ____________________

               1Such  a  summons is  known  colloquially  as  a "John  Doe"
          summons.   The IRS cannot issue  a John Doe summons    defined by
          statute as a  summons "which  does not identify  the person  with
          respect to whose liability the summons is issued"   without first
          securing  court  approval.   I.R.C.    7609(f).   The  reason for
          requiring such approval is obvious:  in the John Doe context, the
          court in effect "takes  the place of the affected  taxpayer" who,
          being unnamed, cannot  herself be  expected to know  about    let
          alone to oppose    the summons even if it  is irregular.  Tiffany
                                                                    _______
          Fine Arts, Inc. v. United  States, 469 U.S. 310, 321 (1985).   We
          _______________    ______________
          discuss the mechanics of the preapproval process infra.
                                                           _____

                                          5

          the summonses.  It found as a fact that the IRS's purported probe

          of the law firm's  tax-related affairs was a  hoax, and that  the

          IRS should have complied  with I.R.C.   7609(f) prior  to serving

          the summonses.  See  Gertner, 873 F. Supp.  at 734.  Nor  did the
                          ___  _______

          court  stop  there;  it  proceeded   to  hold  that,  under   the

          circumstances  here  obtaining,  the   attorney-client  privilege

          thwarted  the IRS's  demand  for  information  concerning  client

          identity.  See id. at 734-37.  This appeal ensued.
                     ___ ___

          II.  ANALYSIS
          II.  ANALYSIS

                    We split  our analysis into three segments.   First, we

          limn  the   framework   for  determining   whether  the   federal

          judiciary's imprimatur  should be impressed upon  an IRS summons.

          Next, we mull the  district court's finding on the  pretext issue

          under  the deferential standard  of review that  pertains in this

          context.  Lastly, we explain why the IRS's failure to comply with

          I.R.C.   7609(f) effectively ended the case.

                                  A.  The Framework.
                                  A.  The Framework.
                                      _____________

                    The IRS  has broad  authority to issue  summonses under

          I.R.C.    7602 &  7604.  Enforcement proceedings are  designed to

          be summary, see  Donaldson v.  United States, 400  U.S. 517,  529
                      ___  _________     _____________

          (1971); United States v.  Freedom Church, 613 F.2d 316,  321 (1st
                  _____________     ______________

          Cir. 1979), and the court's role is simply to ensure that the IRS

          is using its broad authority in good faith and in compliance with

          the law.   See Donaldson, 400 U.S. at 536;  United States v. Kis,
                     ___ _________                    _____________    ___

          658  F.2d 526, 535  (7th Cir. 1981), cert.  denied, 455 U.S. 1018
                                               _____  ______

          (1982).  Thus, when a  challenge to a summons is lodged,  the IRS

                                          6

          must only satisfy the  court that (1) its investigation  is being

          conducted  pursuant  to a  proper  purpose,  (2) the  information

          sought  in the summons  is (or may be)  relevant to that purpose,

          (3)  the information is not  already within the IRS's possession,

          and  (4)  all legally  required  administrative  steps have  been

          followed.   See  United  States v.  Powell,  379 U.S.  48,  57-58
                      ___  ______________     ______

          (1964);  Copp v.  United States,  968 F.2d  1435, 1437  (1st Cir.
                   ____     _____________

          1992), cert. denied, 113 S. Ct. 1257 (1993).
                 _____ ______

                    In determining  whether to enforce IRS  summonses under

          these  substantive standards, we do not write on a pristine page.

          This   court  has  constructed   a  three-tiered   framework  for

          expediting such determinations.  See Freedom Church, 613  F.2d at
                                           ___ ______________

          321; United States v.  Salter, 432 F.2d 697, 700 (1st Cir. 1970);
               _____________     ______

          accord  United States v. Church of Scientology, 520 F.2d 818, 824
          ______  _____________    _____________________

          (9th  Cir. 1975); United States v. McCarthy, 514 F.2d 368, 372-73
                            _____________    ________

          (3d Cir. 1975).   To mount  the first tier,  the IRS must make  a

          prima  facie showing that  it is acting  in good faith  and for a

          lawful purpose.  This burden is  not taxing, so to speak.  Courts

          repeatedly have confirmed that  an affidavit of the investigating

          agent attesting  to satisfaction of  the four Powell  elements is
                                                        ______

          itself  adequate to make the requisite prima facie showing.  See,
                                                                       ___

          e.g., Sylvestre v. United States, 978 F.2d 25, 26 (1st Cir. 1992)
          ____  _________    _____________

          (per curiam), cert. denied, 113 S. Ct. 1606 (1993); United States
                        _____ ______                          _____________

          v. Lawn Builders  of New Eng., Inc., 856 F.2d  388, 392 (1st Cir.
             ________________________________

          1988);  Liberty Fin. Servs. v. United States, 778 F.2d 1390, 1392
                  ___________________    _____________

          (9th Cir. 1985); Kis, 658 F.2d at 536.
                           ___

                                          7

                    Once this  minimal showing surfaces, the  burden shifts

          to the taxpayer  to rebut the good-faith  presumption that arises

          in consequence  of  the  government's  prima facie  case.2    The

          taxpayer   is  not  at  this   stage  required  to  disprove  the
                                                              ________

          government's profession  of  good faith.   See  United States  v.
                                                     ___  _____________

          Samuels, Kramer & Co., 712 F.2d 1342, 1348 (9th  Cir. 1983); Kis,
          _____________________                                        ___

          658  F.2d  at 540.   She  must,  however, shoulder  a significant

          burden of production:   in order to advance past  the first tier,

          the taxpayer  must articulate  specific allegations of  bad faith

          and, if necessary, produce reasonably  particularized evidence in

          support of those allegations.3  See Kis,  658 F.2d at 540; United
                                          ___ ___                    ______

          States  v. Garden  State Nat'l  Bank,  607 F.2d  61, 71  (3d Cir.
          ______     _________________________

          1979); Salter, 432  F.2d at  700.  This  showing does not  demand
                 ______

          that  the taxpayer conclusively give  the lie to  the prima facie

          case, but only  that she  create a "substantial  question in  the

          court's mind regarding the validity of the government's purpose."

          Salter, 432 F.2d at  700; accord Church of Scientology,  520 F.2d
          ______                    ______ _____________________

                              
          ____________________

               2The  summons enforcement  framework  is reminiscent  of the
          "proof  structure" for  proving intentional  discrimination under
          Title VII.  See Texas Dep't of Community Affairs v.  Burdine, 450
                      ___ ________________________________     _______
          U.S. 248, 252-55  (1981); McDonnell Douglas  Corp. v. Green,  411
                                    ________________________    _____
          U.S. 792, 802-05 (1973).

               3Although  some cases  refer  to the  taxpayer's "burden  of
          proof" at this stage,  see, e.g., United States v.  Balanced Fin.
                                 ___  ____  _____________     _____________
          Mgmt.,  Inc., 769 F.2d 1440,  1444 (10th Cir.  1985); Salter, 432
          ____________                                          ______
          F.2d  at 700,  those cases are  not necessarily at  odds with our
          description  of the framework's second tier.  The term "burden of
          proof" may  refer to either a burden or production or a burden of
          persuasion.  See Kenneth S. Broun et al., McCormick on Evidence  
                       ___                          _____________________
          336 (4th  ed. 1992).  Only  the burden of production  is at issue
          when the taxpayer attempts to rebut the IRS's prima facie showing
          and thereby justify further inquiry.

                                          8

          at 824; McCarthy, 514 F.2d at 376.  To reach this goal, it is not
                  ________

          absolutely  essential  that  the taxpayer  adduce  additional  or

          independent  evidence; she may hoist her  burden either by citing

          new  facts or  by  bringing to  light  mortal weaknesses  in  the

          government's proffer. 

                    If  the taxpayer  satisfies this burden  of production,

          the third tier beckons.  At this stage, the district court weighs

          the facts,  draws inferences, and decides  the issue.  To  do so,

          the  court frequently  will  proceed to  an evidentiary  hearing,

          taking testimony  and exhibits  from  both sides.   See  Samuels,
                                                              ___  ________

          Kramer, 712  F.2d at 1347-48; Salter, 432 F.2d at 700.  But there
          ______                        ______

          is no  hard-and-fast rule compelling  an evidentiary hearing.   A

          district court  may, in  appropriate circumstances, forgo  such a

          hearing and decide the issues on the existing  record.  See Copp,
                                                                  ___ ____

          968 F.2d at 1438 n.1; McCarthy, 514 F.2d at 373.
                                ________

                    A  question  lingers  at  the  third  tier  as  to  the

          continuing  viability of the original presumption in favor of the

          IRS.   The case law seems to suggest that the presumption endures

          and serves at  this stage to saddle the taxpayer  with the burden

          of persuading the judge, qua factfinder, that at least one of the
                                   ___

          Powell  elements is  missing.   See, e.g.,  Kis, 658 F.2d  at 540
          ______                          ___  ____   ___

          (stating  that a  taxpayer  "can succeed  only  by showing  by  a

          preponderance of the evidence some improper use of the summons by

          the  IRS"); Freedom  Church,  613 F.2d  at  319 ("The  burden  of
                      _______________

          proving an abuse of the court's process or the absence  of one of

          the Powell elements of good faith is on the summonee."); see also
              ______                                               ___ ____

                                          9

          United States v. Balanced  Fin. Mgmt., Inc., 769 F.2d  1440, 1445
          _____________    __________________________

          (10th  Cir. 1985).  We  are somewhat skeptical  of this approach,

          especially   given   the  Supreme   Court's   recent   lesson  on

          presumptions and burdens of  proof in an analogous setting.   See
                                                                        ___

          St. Mary's  Honor Ctr.  v. Hicks,  113 S.  Ct. 2742,  2747 (1993)
          ______________________     _____

          (holding  that a Title VII  plaintiff always bears  the burden of

          persuasion despite the  presumption in her  favor created by  her

          prima  facie case).   The  Court's  treatment of  presumptions in

          Hicks is  consistent with  the basic  principle, codified  in the
          _____

          Federal Rules of Evidence:

                    In  all  civil  actions  and  proceedings not
                    otherwise provided for by  Act of Congress or
                    by these rules, a presumption imposes on  the
                    party against whom it  is directed the burden
                    of  going forward  with evidence to  rebut or
                    meet the presumption,  but does not shift  to
                    such party  the burden of proof  in the sense
                    of the risk  of nonpersuasion, which  remains
                    throughout the  trial upon the party  on whom
                    it was originally cast.

          Fed. R. Evid. 301.

                    We  are hard-pressed  to  fathom  why  IRS  enforcement

          proceedings should diverge from  this principle.  It is  the IRS,

          not  the  taxpayer, that  seeks to  invoke  the processes  of the

          court; and, in a  related vein, the court is  instructed to grant

          the  requested  relief  only  when "sufficient  proof  is  made."

          I.R.C.   7604(b).  Though it certainly can be argued that "strong

          reasons of  public  policy"  justify  a  burden-shifting  scheme,

          Salter, 432 F.2d at 700, it  would seem that the IRS's legitimate
          ______

          interest  in  obtaining  summary  enforcement  is  satisfactorily

          addressed by  the particularized burden of  production imposed on

                                          10

          the  taxpayer, without going the  whole hog.4   See, e.g., United
                                                          ___  ____  ______

          States  v.  Euge,  444 U.S.  707,  719  (1980)  (stating that  in
          ______      ____                                               __

          addition  to the taxpayer's right to challenge a summons, the IRS
          ________  __

          "must also establish [its]  compliance with the [four recognized]

          good faith requirements"); McCarthy,  514 F.2d at 373 (suggesting
                                     ________

          that "the Secretary should  be prepared to prove the  allegations

          of  the  complaint  that the  summons  complies  with the  Powell
                                                                     ______

          requirements").

                    While  this  point  is intellectually  interesting,  we

          defer a definitive decision on it to a different day.  After all,

                              
          ____________________

               4The  cases suggesting  that the  taxpayer has  the ultimate
          burden  of persuasion  rely  principally  on isolated  statements
          extracted from Powell  and United States  v. LaSalle Nat'l  Bank,
                         ______      _____________     ___________________
          437  U.S. 298  (1978).   Foremost among  these statements  is the
          Powell  Court's comment that "[t]he burden of showing an abuse of
          ______
          the court's process is on the taxpayer."  379 U.S. at 58.  We are
          not confident that  this slender  reed can bear  the strain  that
          subsequent opinions have placed on it.  Powell itself imposed the
                                                  ______
          burden  on  the  IRS to  "show  that  the  investigation will  be
          conducted pursuant to a legitimate purpose, that the  inquiry may
          be  relevant to the purpose,  that the information  sought is not
          already  within  the  Commissioner's  possession,  and  that  the
          administrative steps  required by  the Code have  been followed."
          Id. at 57-58.   The  Court's subsequent reference  to proving  an
          ___
          abuse  of process,  read  in context,  seems  to be  confined  to
          affirmative  defenses, e.g.,  allegations  of  harassment in  the
          conduct of an investigation.  See id. at 58.
                                        ___ ___
                    By  like  token,  the  LaSalle Court's  statement  that
                                           _______
          "those  opposing enforcement of a  summons do bear  the burden to
          disprove  the actual existence of a valid civil tax determination
          or  collection purpose  by the  Service," 437  U.S. at  316, does
          little to prop up the government's burden-of-proof argument.  The
          LaSalle  Court  held  that,  even  if  the  IRS  had  a  criminal
          _______
          prosecution  in mind,  this fact  would not  constitute a  per se
          improper purpose  for a civil summons, because civil and criminal
          tax  investigations  are  typically too  intertwined  to untangle
          easily.  See id. at 314-16.  Hence,  the quoted statement applies
                   ___ ___
          only in situations where the taxpayer is seeking to avail herself
          of  the "sole criminal purpose" defense to a summons.  See, e.g.,
                                                                 ___  ____
          Copp, 968 F.2d at 1437.
          ____

                                          11

          the respondents concede that  the district court tacitly required

          them  to  prove  improper  purpose  by  a  preponderance  of  the

          evidence,  and they  accepted  the burden  of  proof without  any

          objection.   Consequently, we proceed  on the assumption that the

          lower  court's resolution of the  issue will prevail  only if the

          record suffices  for a finding  that the respondents  carried the

          devoir of persuasion.

                         B.  The Finding of Improper Purpose.
                         B.  The Finding of Improper Purpose.
                             _______________________________

                    With this  structure in mind,  we turn to  the district

          court's determination  that the IRS's stated  purpose for issuing

          the summonses   its avowed desire to investigate the respondents'

          law firm   was merely a pretext to enable it  to learn more about

          the intervenor.

                    At the  outset,  we are  constrained to  note that  the

          remarkably  thin prima  facie case  established by  Agent Ameno's

          declaration provides  a shallow  foundation for a  presumption in

          favor of  the  government.   While  the declaration  touches  the

          requisite bases    it  contains the bareboned  allegations needed

          for the government's prima  facie showing   it is  utterly devoid

          of specifics.  Though a conclusory affidavit is enough to satisfy

          the  government's burden at the first tier of the framework, see,
                                                                       ___

          e.g., Sylvestre, 978 F.2d at 26; Lawn  Builders, 856 F.2d at 392,
          ____  _________                  ______________

          it  can  come back  to haunt  the proponent  if  it is  not later

          supplemented by  more hearty fare once the challenger succeeds in

          scaling the second tier.

                    At any rate, the government effectuated its prima facie

                                          12

          showing with little room  to spare.   The burden then shifted  to

          the  respondents  to  produce   evidence  and/or  allegations  of

          sufficient  force and exactitude to warrant  further inquiry.  To

          meet  this  burden, the  respondents  argued  that the  summonses

          should be  shelved because  the government's professed  purpose  

          linking the summonses to an investigation into the law firm's tax

          liability   was pretextual.

                    Contrary to the government's dismissive suggestion, the

          respondents did  not simply level the charge.   In support of it,

          they submitted  two affidavits.   One affidavit  incorporated the

          extensive  correspondence between  the  firm and  the  IRS.   The

          second affidavit  chronicled the firm's  meticulous attention  to

          income reporting requirements, and  asserted that the IRS already

          had  the data it  needed to determine whether  the firm had fully

          complied  with its  tax-related  obligations.   In addition,  the

          respondents documented  several public  statements which  seem to

          imply  that the IRS's  purpose in issuing  summonses to attorneys

          for  the records of large cash-paying clients is designed less to

          monitor  lawyers' compliance  with  the  tax  laws, and  more  to

          address money  laundering,  narcotics distribution,  and  kindred

          criminal  activity on the part  of lawyers' clients.   See, e.g.,
                             ________________________________    ___  ____

          IRS  Publication 1544 (rev. Aug. 1994) (stating that Form 8300 is

          intended  in part to  help identify  "smugglers and  drug dealers

          [who]  use large  cash payments  to `launder' money  from illegal

          activities");  IRS News  Release IR-93-113  (Dec. 7,  1993) ("The

          data  [obtained  through  Form  8300]  helps  detect   nonfiling,

                                          13

          unreported  income, and  money laundering  often associated  with

          narcotic trafficking and other illegal  activities by some of the

          customers  and clients  of  the businesses  required to  file.").

          Finally, the respondents pointed  out that the Ameno declaration,

          which purported to describe the ongoing investigation  of the law

          firm, was nothing but boilerplate.5

                    The lower  court concluded  on this chiaroscuro  record

          that  the government's supposed investigation of the law firm was

          a  pretext for  an anticipated  investigation of  John Doe.   See
                                                                        ___

          Gertner,  873 F.  Supp. at  734.   On appeal,  the IRS  rides two
          _______

          horses  into the breach.   First, it maintains  that the district

          court  erred  in  stabling   the  summonses  without  holding  an

          evidentiary  hearing.  Second, it posits that, in all events, the

          court's ultimate finding of pretext,  based on the record  before

          it, is unsupportable.  Both steeds are lame.

                    1.    The  Need  for  an   Evidentiary  Hearing.    The
                    1.    The  Need  for  an   Evidentiary  Hearing.
                          _________________________________________

          government's  first question  is easily  answered.   The decision

          whether  to hold an evidentiary hearing in a given case generally

          rests within the sound discretion of the trial court.  See, e.g.,
                                                                 ___  ____

          Weinberger v. Great N. Nekoosa Corp., 925 F.2d 518, 527 (1st Cir.
          __________    ______________________

          1991); United States  v. Panitz,  907 F.2d 1267,  1273 (1st  Cir.
                 _____________     ______

          1990); United States  v. DeCologero,  821 F.2d 39,  44 (1st  Cir.
                 _____________     __________

                              
          ____________________

               5The  declaration  matched,   almost  word  for  word,   the
          declaration at issue  in United  States v. Ritchie,  15 F.3d  592
                                   ______________    _______
          (6th  Cir.), cert. denied,  115 S.  Ct. 188  (1994), and,  as the
                       _____ ______
          government  conceded   at  oral   argument,  was   "the  standard
          affidavit"  that the  IRS routinely  uses in  summons enforcement
          proceedings spurred by Form 8300 filings.

                                          14

          1987).  This discretion remains fully intact when the business of

          the  day is the  enforcement of an  IRS summons.   See Fortney v.
                                                             ___ _______

          United States, 59 F.3d 117, 121 (9th Cir. 1995) ("We defer to the
          _____________

          district court's  discretion to decide if  an evidentiary hearing

          on the  question  of enforcement  of a  summons is  warranted.");

          Hintze  v.  IRS, 879  F.2d 121,  126  (4th Cir.  1989) (similar).
          ______      ___

          Appellate review  is, therefore,  deferential; we will  interfere

          with  a  district  court's  bottom-line decision  to  conduct  or

          withhold  an   evidentiary  hearing  in  a   summons  enforcement

          proceeding  only if  the appellant demonstrates  an abuse  of the

          trial court's substantial discretion.  See Copp, 968 F.2d at 1438
                                                 ___ ____

          n.1.

                    We  discern no  abuse in  this situation.   At  no time

          during the proceedings below did  the IRS request an  evidentiary

          hearing.   Rather, it  vigorously (and successfully)  opposed the

          respondents' request for  such a  hearing.  In  other words,  the

          government  chose to  roll  the dice,  apparently confident  that

          Agent   Ameno's  conclusory   declaration  would   withstand  the

          respondents' allegations and evidence.   Having gambled and lost,

          the government is  in a  perilously poor position  to pursue  the

          point.  In any event, "[w]e regularly turn a deaf ear to protests

          that an  evidentiary hearing  should have  been convened but  was

          not,  where, as here,  the protestor  did not  seasonably request

          such a  hearing in the lower  court."  Aoude v.  Mobil Oil Corp.,
                                                 _____     _______________

          892 F.2d 1115, 1120 (1st Cir. 1989); see also Sylvestre, 978 F.2d
                                               ___ ____ _________

          at 28 n.3  (explaining that  a taxpayer's failure  to request  an

                                          15

          evidentiary hearing in the district court precluded consideration

          of his later claim  that such a hearing  should have been  held);

          see generally CMM Cable  Rep., Inc. v. Ocean Coast  Props., Inc.,
          ___ _________ _____________________    _________________________

          48 F.3d  618, 622 (1st Cir.  1995) ("A party who  neglects to ask

          the  trial court for relief that it might reasonably have thought

          would  be available  is not  entitled to  importune the  court of

          appeals to grant that relief.").

                    2.   The Supportability  of the  Crucial Finding.   The
                    2.   The Supportability  of the  Crucial Finding.
                         ___________________________________________

          remaining  question is  whether the  district court's  finding of

          pretextual purpose is supportable.  Determining the IRS's purpose

          in  conducting an  investigation  is, like  most  motive-oriented

          explorations, a predominantly  factbound enterprise.   It follows

          that, absent  a  mistake of  law,  an appellate  tribunal  should

          disturb the  district court's determination only if it is clearly

          erroneous.  See  United States v. Ritchie, 15 F.3d  592, 599 (6th
                      ___  _____________    _______

          Cir.), cert.  denied, 115 S.  Ct. 188 (1994);  Copp, 968  F.2d at
                 _____  ______                           ____

          1437;  Hintze, 879 F.2d at  1426; Ponsford v.  United States, 771
                 ______                     ________     _____________

          F.2d 1305, 1307-08 (9th Cir. 1985).   This means, of course, that

          if  there  are  two  or more  plausible  interpretations  of  the

          evidence, the district court's choice among them must  hold sway.

          See Johnson v. Watts  Regulator Co., ___ F.3d ___, ___  (1st Cir.
          ___ _______    ____________________

          1995) [No. 95-1002, slip op. at 22].

                    Here, no  clear error looms.  The government's case for

          enforcing the summonses depended  entirely on Agent Ameno's self-

          serving declaration (which, as we have previously indicated, is a

                                          16

          web   of  unsubstantiated   conclusions).     In  contrast,   the

          respondents fashioned a sufficient evidentiary  infrastructure to

          support  an inference that the IRS's sole purpose in pursuing the

          summonses  was to  gain  information about  the lawyers'  unnamed

          client.   The law  firm's affidavit, if  credited, indicates that

          the  IRS had no apparent reason  to suspect it of any tax-related

          impropriety.    And,  moreover,  the  IRS's   use  of  a  generic

          affidavit,  devoid of  particularization, suggests  that the  IRS

          never  really suspected  the firm  of any  questionable activity.

          The IRS's stonewalling    its unexplained  refusal to answer  the

          firm's  repeated inquiries  as to  whether it  was in  fact under

          investigation   points in the same direction.  These facts, taken

          in  light   of  the  IRS's  self-proclaimed   practice  of  using

          information  gleaned  from  attorneys'  Form 8300  filings  as  a

          vehicle for investigating clients  who pay counsel fees in  cash,

          make the district court's conclusion that  the IRS's interest lay

          only in  the  unidentified  client  seem  quite  plausible.    We
          ____

          conclude, therefore,  that notwithstanding any  presumption which

          may  have accompanied  the IRS's prima  facie showing,  the court

          below reasonably  could have  found that  a preponderance  of the

          evidence  favored  the  respondents'  claim  of  pretext.6    See
                                                                        ___
                              
          ____________________

               6The  government   argues  that  this   finding  is   flatly
          inconsistent with the district court's original acceptance of the
          Ameno declaration as a sufficient basis for issuing a  show-cause
          order.  We do not agree.   The acceptance of the IRS's first-tier
          proffer signifies nothing more  than the court's  acknowledgement
          that  the IRS has mustered a prima facie showing for enforcement.
          Once the  respondents met their second-tier  burden of production
          and  raised  a legitimate  question  about  the  validity of  the
          summonses, however, the court was free to reevaluate the original

                                          17

          Ritchie,  15  F.3d  at  599  ("Although  there  was  evidence  to
          _______

          contradict  this view  and the  IRS strenuously  objects to  [the

          court's] finding,  [the] findings are not  clearly erroneous, and

          we therefore adopt them.").

                    The  government  argues  that  the  decision  in United
                                                                     ______

          States v.  Tiffany Fine Arts,  Inc., 718 F.2d  7 (2d  Cir. 1983),
          ______     ________________________

          aff'd,  469 U.S. 310 (1985), should propel us toward the opposite
          _____

          conclusion.   There, the  Second Circuit upheld  a summons issued

          for the dual purpose of  investigating both a designated taxpayer

          and  a John  Doe, see 718  F.2d at  13-14, and  the Supreme Court
                            ___

          affirmed, see 469 U.S. at 324.   The government tries to shoehorn
                    ___

          this case into the Tiffany last.  The fit, however, is imperfect.
                             _______

                    In Tiffany, unlike here, the district court ascertained
                       _______

          as a matter of fact  that the IRS had a dual purpose, that is, an

          actual interest in the investigation of both the taxpayer and the
                                                  ____              ___

          John Doe.  See  469 at 317 (recounting district  court's findings
                     ___

          of fact).  In this case, the district court  ascertained, also as

          a matter of fact, that the IRS did not have an actual interest in
                                             ___

          the investigation  of the  taxpayer (the respondents'  law firm),

          but only  in learning more about  John Doe.  Thus,  the two cases
              ____

          are not fair  congeners except  to the extent  that, given  Judge

          Brody's supportable  factual finding that the  summonses at issue

          here were not dual purpose summonses, the Supreme Court's opinion

          in Tiffany clearly indicates that we should respect that finding.
             _______

          See  id. at 322.  And,  once the judge determined  as a matter of
          ___  ___
                              
          ____________________

          proffer in light of the respondents' counter-proffer.

                                          18

          fact  that  the  government's   actual  purpose  in  issuing  the

          summonses was to further an  investigation of the unnamed client,

          the follow-on conclusion that the government should have complied

          with  the  procedure  for  issuing  John  Doe  summonses  becomes

          irresistible.7  See id.
                          ___ ___

                    We  take  no  pleasure  in  upholding  a  finding  that

          government actors  constructed a pretext to  avoid due compliance

          with statutorily  prescribed requirements.   But the  court below

          did not reach  this conclusion lightly and  the record, carefully

          examined,  does not  give  rise to  a  firm conviction  that  the

          court's judgment is wide  of the mark.  Accordingly,  the finding

          of pretextual purpose must stand.

                 C.  The Remainder of the District Court's Decision.
                 C.  The Remainder of the District Court's Decision.
                     ______________________________________________

                    Despite its  double-edged  determination that  the  IRS

          ought to have complied  with the strictures of I.R.C.    7609(f),

          but did  not do  so, the  district court  proceeded to  reach and
                              
          ____________________

               7At oral  argument in  this court, the  government belatedly
          contended  that  the  summonses  should  be  enforced  simply  to
          effectuate compliance with the  reporting requirements of section
          6050I itself.   This nascent contention materialized  out of thin
          air; prior  to oral  argument, the  government  had attempted  to
          justify the  summons solely as  a means of  investigating whether
          the law firm had reported all the income required to be reported.
          Since the  record reveals beyond  hope of contradiction  that the
          government's  newly minted contention  was not made  below in any
          coherent  fashion, we  will not  entertain it  here.   See United
                                                                 ___ ______
          States  v. Zannino,  895  F.2d 1,  17  (1st Cir.)  (discussing  a
          ______     _______
          litigant's  obligation to  spell out  its arguments  squarely and
          distinctly  in  the trial  court),  cert. denied,  494  U.S. 1082
                                              _____ ______
          (1990);  Patterson-Leitch  Co.  v. Massachusetts  Mun.  Wholesale
                   _____________________     ______________________________
          Elec. Co.,  840 F.2d 985, 990 (1st Cir. 1988) (similar).  In this
          _________
          connection,  we remind the  government that  "[p]assing allusions
          are not adequate to preserve an  argument in either a trial or an
          appellate venue."  United  States v. Slade, 980 F.2d  27, 30 (1st
                             ______________    _____
          Cir. 1992).

                                          19

          resolve  the other issues in the case.   It is not entirely clear

          why the  court chose to grapple  with these issues.   It may have

          intended to  articulate an  alternative ground for  rejecting the

          summonses, or it  may have  thought the IRS's  failure to  comply

          with I.R.C.   7609(f) to  be a specie of harmless error.  We need

          not resolve the  ambiguity.   If the court  extended its  journey

          merely  to  memorialize a  further  basis for  its  decision, the

          additional holdings are  surplusage and can be disregarded.   See
                                                                        ___

          Kastigar v. United States, 406 U.S. 441, 454-55 (1972) (rejecting
          ________    _____________

          language  "unnecessary  to  the  Court's   decision"  as  binding

          authority in subsequent cases).  On the  other hand, if the court

          ventured afield because it  concluded that the government's bevue

          was harmless, the court miscalculated.  We explain briefly.

                    Congress passed section 7609(f) specifically to protect

          the  civil rights,  including  the privacy  rights, of  taxpayers

          subjected to  the IRS's aggressive use  of third-party summonses.

          See  S. Rep. No. 938, 94th  Cong., 2d Sess. 368 (1976), reprinted
          ___                                                     _________

          in 1976 U.S.C.C.A.N. 3439,  3797; H.R. Rep. No. 658,  94th Cong.,
          __

          2d Sess.  307 (1975), reprinted in 1976  U.S.C.C.A.N. 2897, 3203;
                                _________ __

          see generally Tiffany, 469 U.S.  at 315-17 (discussing history of
          ___ _________ _______

            7609).   Section 7609(f)  accomplishes this  goal by  providing

          that  a John  Doe summons  is not  valid unless  and until  it is

          authorized  by a judicial officer after a hearing (normally an ex

          parte hearing, given the  nature of the problem).   In the  court

          proceeding, the IRS must establish that:

                         (1)   the   summons   relates   to   the
                    investigation  of  a  particular   person  or

                                          20

                    ascertainable group or class of persons,
                         (2)  there  is  a reasonable  basis  for
                    believing that such person  or group or class
                    of  persons may  fail or  may have  failed to
                    comply  with any  provision  of any  internal
                    revenue law, and
                         (3)   the   information  sought   to  be
                    obtained from the  examination of the records
                    (and the  identity of the  person or  persons
                    with respect to  whose liability the  summons
                    is  issued)  is  not readily  available  from
                    other sources.

          I.R.C.   7609(f).

                    This   requirement  of   judicial  preapproval   is  an

          important  component  of the  statutory  scheme;  it permits  the

          district court to act as a surrogate for the unnamed taxpayer and

          to  "exert[] a restraining influence  on the IRS."   Tiffany, 469
                                                               _______

          U.S. at 321.  The statutory protections cannot be cavalierly cast

          aside by either the executive or  the judicial branch.  Hence, if

          the enforcement  proceeding results  in a determination  that the

          IRS does not  in fact intend to  investigate a named  party, then

          the IRS cannot  obtain the  data it seeks  without observing  the

          mandate of section 7609(f).  See id. at 322.
                                       ___ ___

                    So  it is here.  The court below supportably found that

          the  IRS  had  no  intention  of  investigating  the  tax-related

          liability  of  the respondents'  law  firm.   Therefore,  the IRS

          cannot obtain the  identity of the anonymous client    John Doe  

          by means of these summonses unless and until it  runs the section

          7609(f)  gauntlet.   To  hold  otherwise would  be  tantamount to

          assuming  either that section 7609(f) is nugatory or that the IRS

          will  always  be able  to fulfill  the  statute's demands.   Such

          assumptions have  no basis  in  law or  in fact.    The John  Doe

                                          21

          summons procedures  represent a basic legislative  judgment about

          the  importance of  taxpayers'  privacy and  other  rights    and

          courts must respect that judgment.

                    To  be  sure, the  harmless  error  argument derives  a

          superficial measure of credibility from Ritchie, a  case in which
                                                  _______

          the  Sixth Circuit held that,  despite a finding  of pretext, the

          IRS did  not have  to go  back through the  protocol mandated  by

          I.R.C.    7609(f).  See  Ritchie, 15  F.3d at 600.   The  Ritchie
                              ___  _______                          _______

          court  thought that "it would  exalt form over  substance to make

          the IRS go through the motions" required by section 7609(f), only

          "to  bring us back  to where we are  now."  Id.  at 600.  Passing
                                                      ___

          over the court's somewhat casual view of the protections afforded

          by the John Doe  summons procedures,8 and without ruling  out any

          possibility of  harmless  error in  this context,  we think  that

          under section 7609(f) form  is substance, and that the  procedure
                                      __

          mandated by Congress generally must be followed.

                    In  all  events,  Ritchie  is  plainly distinguishable.
                                      _______

          There, unlike  here, an  evidentiary hearing  had been  held, the

          statutory  protections  had  been  afforded "in  spirit"  if  not

          literally, and  the record  contained  sufficient information  to

          persuade  the court that the IRS had met "the substantive factors
                              
          ____________________

               8Ritchie suggests  that the "statutory  protections are  not
                _______
          strong in any  event."  15  F.3d at  600 n.8.   But strength  and
          weakness  are  relative  concepts,  and section  7609(f)  is  not
          totally devoid  of muscle.   Among other things,  the requirement
          that the IRS  have a  "reasonable basis for  believing" that  the
          unidentified  taxpayer may have  violated internal  revenue laws,
          I.R.C.     7609(f)(2),  differs significantly  from  the  minimal
          showing the  IRS  must  make  under  Powell  to  obtain  judicial
                                               ______
          enforcement of other kinds of summonses.

                                          22

          of    7609(f)."  Ritchie, 15 F.3d  at 600.  We have no comparable
                           _______

          record before us, and  no basis to assume that the IRS ultimately

          will pass the  statutory test.   In particular,  among the  other

          requirements for  a John  Doe summons,  the IRS must  demonstrate

          that it  possesses  a reasonable  basis  for believing  that  the

          unnamed taxpayer may  have failed  to comply with  the tax  laws.

          See I.R.C.    7609(f)(2).    In this  case,  we have  only  Agent
          ___

          Ameno's  conclusory  declaration, directed  on  its  face at  the

          respondents  (not at  John  Doe).   If  this were  sufficient  to

          satisfy  the  imperatives  of  section   7609(f),  then  judicial

          preapproval would  become a charade,  and section 7609(f)  a dead

          letter.9

                    We need  go  no  further.    Any way  we  look  at  the

          situation, the district court's views as to the applicability vel
                                                                        ___

          non  of the  attorney-client privilege  are not necessary  to the
          ___

          result.    Consequently,  we have  no  occasion  to consider  the

          correctness of the court's conclusions on those issues.

          III.  CONCLUSION
          III.  CONCLUSION

                    The district  court's finding that  the summonses  were

          not drawn  in connection  with  a probe  of the  law firm's  tax-

          related liability,  but, instead, for the  clandestine purpose of
                              
          ____________________

               9We note, too, that the  Sixth Circuit explicitly warned the
          IRS  that  it  was issuing  a  "one-time only"  free  pass.   See
                                                                        ___
          Ritchie, 15 F.3d at 600 ("We are not suggesting that  the IRS may
          _______
          in  the future  avoid  going  through  the  ex  parte  proceeding
          required by   7609(f), for now the IRS has fair notice that if it
          cannot demonstrate a bona fide interest  in investigating the tax
          liability   of  the  party  summoned,  it   must  comply  with   
          7609(f).").   The government cannot  legitimately expect  another
          free pass this time around.

                                          23

          investigating  the   lawyers'  unnamed   client,  John   Doe,  is

          supportable.   This means that the government is legally bound to

          follow  the prescribed  procedure  for the  service  of John  Doe

          summonses.  See I.R.C.    7609(f).  It has not done  so.  Summons
                      ___

          enforcement  should be denied  for that  reason, and  that reason

          alone.

                    We are mindful that restricting our disposition to this

          narrow ground leaves larger  issues unresolved, see, e.g., United
                                                          ___  ____  ______

          States v. Sindel, 53 F.3d 874, 877-78 (8th Cir. 1995) (discussing
          ______    ______

          ethical   implications   and  applicability   of  attorney-client

          privilege in   6050I summons enforcement proceeding brought after

          attorney withheld client's identity); United States v. Leventhal,
                                                _____________    _________

          961 F.2d 936, 940-41 (11th Cir. 1992) (similar); United States v.
                                                           _____________

          Goldberger & Dubin,  P.C., 935  F.2d 501, 503-06  (2d Cir.  1991)
          _________________________

          (similar), and that these  issues are freighted with consequence.

          But  courts must resist the  temptation to pluck  issues from the

          stalk before their time.  The judicial task, properly understood,

          should concentrate  on those  questions that  must be  decided in

          order to resolve  a specific case.  This is  especially true when

          unsettled issues of broad  public concern are afoot.   See Eccles
                                                                 ___ ______

          v.  Peoples Bank,  333  U.S. 426,  432 (1948)  (Frankfurter, J.);
              ____________

          Ashwander  v. TVA,  297 U.S.  288, 345-48  (1936)  (Brandeis, J.,
          _________     ___

          concurring).   In this sense, the science of horticulture is like

          the art of  judging:  yearning for the blossom  when only the bud

          is ready enhances the growth of neither the flower nor the law.

                                          24

          Affirmed.
          Affirmed.
          ________

                                          25