Court Opinion

ID: 8946075
Source: CourtListenerOpinion
Date Created: 2022-11-27 08:22:21.890546+00
Date Added: 2024-06-11T17:09:50.752456
License: Public Domain

ROBERT MADDEN HILL, Circuit Judge,
with whom Circuit Judge REAVLEY joins, concurring:
While I am compelled by our holding in United States v. Texas Heart Institute, 755 F.2d 469 (5th Cir.1985), to join in the panel’s opinion, I believe that the result reached today is out of step with the Supreme Court’s expansive reading of 26 U.S.C. § 7602 which grants the IRS the authority to “examine any books, papers, records or other data .which may be relevant ... [and to summon] any person having possession of books of account ... relevant or material to such inquiry.”
The statutory right to privacy asserted by Barrett imposes significant limitations on the IRS’s power under section 7602 to collect information which is relevant to its investigation. Had Texas Heart examined the authorities which address the scope of the IRS’s powers under section 7602 I believe it would have discerned a common theme; they all decline to circumscribe purposeful and productive exercise of these powers “absent unambiguous directions from Congress.” United States v. Arthur Young & Co., 465 U.S. 805, 816, 104 S.Ct. 1495, 1502, 79 L.Ed.2d 826 (1984) (quoting United States v. Bisceglia, 420 U.S. 141, 150, 95 S.Ct. 915, 920, 43 L.Ed.2d 88 (1975)); United States v. Euge, 444 U.S. 707, 715, 100 S.Ct. 874, 880, 63 L.Ed.2d 141 (1980). The folio-wing summary of the relevant authority supports this conclusion.
In United States v. Powell, 379 U.S. 48, 85 S.Ct. 248, 13 L.Ed.2d 112 (1964), for example, the Supreme Court refused to read into section 706(b), prohibiting “unnecessary examination^],” a requirement that enforcements of summonses be founded on probable cause. The Court reasoned that “[although a more stringent interpretation is possible ... we reject such an interpretation because it might seriously hamper the Commissioner in carrying out investigations he thinks warranted____" 379 U.S. at 53-54, 85 S.Ct. at 252-53, quoted in United States v. Euge, 444 U.S. at 715, 100 S.Ct. at 880. Similarly in Donaldson v. United States, 400 U.S. 517, 91 S.Ct. 534, 27 L.Ed.2d 580 (1971), the Court declined to limit the summons authority to cases where no criminal prosecution was contemplated. “Any other holding,” said the Court, “would thwart and defeat the appropriate investigatory powers that the Congress has placed in ‘the Secretary or his delegate.’ ” 400 U.S. at 533, 91 S.Ct. at 543. Again, in United States v. Bisceglia, 420 U.S. 141, 95 S.Ct. 915, 43 L.Ed.2d 88, the Court, finding no discernible contrary purpose by Congress, upheld the IRS’s authority under section 7602 to issue a “John Doe” summons to a bank to determine the identity of unknown individuals who might be liable for unpaid taxes. The Court again broadly construed the IRS’s summonsing authority in United States v. Euge to permit it to compel the execution of handwriting samples. A contrary result, reasoned the Court, would “stultify enforcement of federal law.” 444 U.S. at 715,100 S.Ct. at 880 (quoting Donaldson v. United States, 400 *1380U.S. at 536, 91 S.Ct. at 545). Finally, in United States v. Arthur Young & Co., the Court declined to accord a privilege to an auditor’s tax accrual workpapers. “We are unable,” wrote the Court, to “discern the sort of ‘unambiguous directions from Congress’ that would justify a judicially created work-product immunity for tax accrual workpapers summoned under § 7602.” 465 U.S. at 816, 104 S.Ct. at 1502.
The power to solicit information from third parties having financial dealings with a particular taxpayer is a vital part of the IRS’s information-gathering authority. In connection therewith Congress has also seen fit to protect citizens from unnecessary intrusions into their privacy and has enacted civil remedies and criminal penalties. We have no indication, however, that Congress intended sections 6103 and 7431 to burden purportedly “summary” enforcement proceedings with the time-consuming litigation that section 6103(k)(6) determinations would entail. It is my belief that this statutory right of privacy is not without bounds; under the current jurisprudence of the Supreme Court it is circumscribed by the remedies explicitly made available by Congress. Although it seems to me that the IRS could pursue its investigation in the present case without informing all of Dr. Barrett’s patients that he is under criminal investigation, I conclude that there is no basis for Texas Heart’s expansion of the district court’s authority in summary enforcement proceedings to find an abuse of discretion beyond those instances specifically envisioned by the Supreme Court in United States v. Powell, 379 U.S. 48, 58, 85 S.Ct. 248, 255,13 L.Ed.2d 112 (1964), namely, when “the summons has been issued for an improper purpose, such as to harass the taxpayer or to put pressure on him to settle a collateral dispute, or for any other purpose reflecting on the good faith of the particular investigation.”