Court Opinion

ID: 9465631
Source: CourtListenerOpinion
Date Created: 2023-08-05 00:51:38.806348+00
Date Added: 2024-06-11T17:39:17.030732
License: Public Domain

BIGGS, Circuit Judge,
dissenting.
116 section 7602 summonses were issued during the following periods: 1 through 19: August 28 to November 12, 1974; 20 through 99: November 12, 1974 to January 31, 1975; and 100 through 116: January 31 to October 81, 1975. Further, there is evidence in the record establishing the fact that each of these summonses was issued as part of simultaneous civil and criminal investigations.
Agent Parisi testified on re-direct examination by Mr. Mendelson, an Assistant United States Attorney, as follows:
“Q. [By Mr. Mendelson] We indicated earlier this morning [that] 116 [Section 7602] summonses were served during your investigation, is that correct?
A. I believe that’s true. [Emphasis added].
Q. Were any of those summons issued solely for the purpose of acquiring criminal evidence?
A. No, sir.
Q. What was your purpose in issuing each and every one of these summonses generally?
A. There was a two-fold purpose; to determine any income tax liability of the taxpayers, and to gather evidence to assist the Interna] Revenue Service to determine whether or not there has been a criminal violation of the Internal Revenue laws. [Emphasis added].
Q. When you say ‘taxpayers’ who do you mean?
A. Corporate taxpayer Genser-Forman, Incorporated, Lester Genser and Lawrence Forman.” (Evidentiary Hearing at 176).
It is clear from the foregoing portion of the record of the evidentiary hearing that the 116th section 7602 summons was brought to the attention of the court and counsel at the evidentiary hearing, and it is also clear from that portion of the evidentiary hearing quoted above that Parisi testified that the purpose of the 116th summons was to gain evidence for the civil recovery of unpaid taxes and also to determine whether or not there was criminal liability.
I do not doubt that United States v. LaSalle National Bank, 437 U.S. 298, 98 S.Ct. 2357, 57 L.Ed.2d 221 (1978), governs the case at bar. The teaching of the Supreme Court in LaSalle is exactly expressed, in my view, by Nuzum, LaSalle National Bank and the Judicial Defenses to the Enforcement of an Administrative Summons, 32 The Tax Lawyer 383, 391 (1979), as follows:
“B. Supreme Court Opinion. In a 5 — 4 decision authored by Justice Blackmun, the Supreme Court reversed the Seventh Circuit’s opinion and held (1) that a summons must be issued before the Service recommends prosecution to the Department of Justice; M [1] that a summons issued prior to such recommendation must be issued in good faith and that a summons issued solely for a criminal investigation is not in good faith; and (3) that the Service is not using its summons authority in good faith if it has abandoned, in an institutional sense, the pursuit of civil tax determination or collection.”
*154To the above I add the following by way of further interpretation of LaSalle. To enforce a section 7602 summons, the IRS must have issued it in good faith use of the authority of section 7602. The IRS must not abandon its institutional authority to determine and collect taxes and civil fraud penalties. The IRS also must not abandon its institutional authority to determine the existence of violation of criminal laws relating to taxation. The two functions are intertwined. That a single agent has in mind gathering evidence for a criminal investigation does not prove institutional bad faith on the part of the IRS. A taxpayer in order to escape the effect of a section 7602 summons must disprove the existence of a valid civil tax determination or collection purpose by the IRS. This the appellants cannot do, for there was, and apparently still is, a valid civil tax investigation resulting in tax liens against the appellants which were in fact ameliorated to some extent by the agreement to release some of the appellants’ assets. See Exhibit G-6 (Evidentiary Hearing at 227).
For the reasons stated, I must respectfully dissent. I deem another evidentiary hearing, which the majority opinion requires, as unnecessary and I would grant the motion of the United States and immediately send down the certified judgment in lieu of the formal mandate.2

. The referral letter of the Internal Revenue Service to the Department of Justice was dated December 12, 1975.
Parisi’s final report was forwarded to the Regional Counsel in September 1975 (Evidentiary Hearing at 62), and the evidentiary hearing upon our remand, when Parisi made the statements quoted above, was October 31, 1978.

. The majority lays emphasis on what it regards as “inordinate and unexplained delays in the investigation” (Majority Opinion at 152). The time factor is not relevant in view of the fact that there was investigation by the IRS as to civil as well as criminal liability during the critical period.
The following dates are relevant:
The last summons, No. 116 (by Gary Neuberger), was issued October 31, 1975 (Evidentiary Hearing at 61).
Agent Parisi started to write his report in March of 1975 (Evidentiary Hearing at 61). Agent Parisi’s final report was sent to the Regional Counsel in September of 1975 (Evidentiary Hearing at 62). Referral to the Department of Justice for prosecution was December 12, 1975 (Evidentiary Hearing at 143-44).
I believe the majority refers to the lapse of time between the date when Parisi started his report and the date he sent it to the Regional Counsel. This lapse was less than six months.
I believe this delay and any others have little significance, if, in fact, delays they be. Judicial notice may be taken of the fact that the IRS does not move with startling speed. To my mind, the delay or delays not only seem short, but to me Parisi seems to have acted with reasonable promptness.