explaining that while an IRS “special agent is an important actor in the process, his motivation is hardly dispositive” when, the “review process over and above his conclusions is multilayered and thorough[ ]”
How later courts described this case
- explaining that while an IRS “special agent is an important actor in the process, his motivation is hardly dispositive” when, the “review process over and above his conclusions is multilayered and thorough[ ]”
- describing robust referral processes before concluding "[n]o recommendation to the [DOJ] for criminal prosecution has been made," despite the fact that the IRS was represented by the Solicitor General's office and had been represented by the DOJ in the court of appeals, see 554 F.2d 302 , 303 (7th Cir. 1977)
- stating that the IRS "must use its summons authority in good-faith pursuit of the congressionally authorized purposes of § 7602"
- explaining that taxpayers bear a "heavy” burden to rebut the government’s showing of the enforceability of a summons
Written by the judges who cited it.
Later courts went against this
Called into doubt by statute, as recognized in United States v. Eugene J. Cahill, Sr.
437 U.S. 298, 98 S.Ct. 2357, 57 L.Ed.2d 221 (1978), called into doubt by statute as stated in United States v. Cahill, 920 F.2d 421, 428 (7th Cir.1990),
Criticized by State v. Beno, 99 Wis. 2d 77 (1980)
LaSalle, supra at n. 4, has been criticized because it offers minimum protection to the taxpayer beyond that provided by a “bright line” test based solely on whether Internal Revenue Service has recommended prosecution.
The opinion
Mr. Justice Stewart,
with whom The Chief Justice, Mr. Justice Rehnquist, and Mr. Justice Stevens join, dissenting.
This case is here only because of judicial misreadings of a passage in the Court’s opinion in Donaldson v. United States, 400 U. S. 517, 533 . That passage has been read by the federal courts, in this case and in others, to mean that a sum *320 mons under § 7602 of the Internal Revenue Code, 26 U. S. C. § 7602 , is improper if issued in aid of an investigation solely for criminal purposes. 1 Yet the statute itself contains no such limitation, and the Donaldson opinion in fact clearly stated that there are but two limits upon enforcement of such a summons: It must be “issued in good faith and prior to a recommendation for criminal prosecution.” 400 U. S., at 536 . I adhere to that view.
The Court concedes that the task of establishing the “purpose” of an individual agent is “undesirable and unrewarding.” Ante, at 316. Yet the burden it imposes today — to discover the “institutional good faith” of the entire Internal Revenue Service — is, in my view, even less desirable and less rewarding. The elusiveness of “institutional good faith” as described by the Court can produce little but endless discovery proceedings and ultimate frustration of the fair administration of the Internal Revenue Code. In short, I fear that the Court’s new criteria will prove wholly unworkable.
Earlier this year the Court of Appeals for the Second Circuit had occasion to deal with the issue now before us in the case of United States v. Morgan Guaranty Trust Co., 572 F. 2d 36 . Judge Friendly’s perceptive opinion for his court in that case read the Donaldson opinion correctly: This Court was there “laying down an objective test, 'prior to a recommendation for criminal prosecution,’ that would avoid a need for determining the thought processes of special agents; and ... the 'good faith’ requirement of the holding related to such wholly different matters as those mentioned in” the case of United States v. Powell, 379 U. S. 48 . 2 “Such a view would ... be *321 consistent with the only rationale that has ever been offered for preventing an otherwise legitimate use of an Internal Revenue Service third party summons, namely that Congress could not have intended the statute to trench on the power of the grand jury or to broaden the Government’s right to discovery in a criminal case . . . 572 F. 2d, at 41-42 .
Instead of standing by the objective and comparatively bright-line test of Donaldson , as now clarified, the Court today further muddies the waters. It does not even attempt to identify the source of the requirements it now adds to enforcement proceedings under §§ 7402 (b) and 7604 (a) of the Code. These requirements are not suggested by anything in the statutes themselves, and nobody suggests that they derive from the Constitution. They are simply imposed by the Court from out of nowhere, and they seem to me unjustified, unworkable, and unwise.
I would reverse the judgment, not for further hearings in the District Court, but with instructions to order enforcement of the summons.
See ante, at 305-306, n. 6.
As Judge Friendly pointed out, this Court’s Powell opinion simply declared that a court may not permit its process in enforcing a summons to be abused, and its examples of “abuse” were:
“ ‘Such an abuse would take place if the summons had been issued for an improper purpose, such as to harass the taxpayer or to put pressure on him *321 to settle a collateral dispute, or for any other purpose reflecting on the good faith of the particular investigation.’ [ 379 U. S., at 58 .]
“Nothing was said to indicate that an intention by the Commissioner to uncover criminal tax liability would reflect 'on the good faith’ of the inquiry, and the rule of ejusdem generis would dictate the contrary.” 572 F. 2d, at 40 .