CIR v. Backer, Civ. A. No. 1582.

• Decision Date: 07 August 1959
• Docket Number: Civ. A. No. 1582.
• Parties: COMMISSIONER OF INTERNAL REVENUE v. Sidney BACKER.
• Court: U.S. District Court — Middle District of Georgia

178 F. Supp. 256

COMMISSIONER OF INTERNAL REVENUE v. Sidney BACKER.

Civ. A. No. 1582.

United States District Court M. D. Georgia, Macon Division.

August 7, 1959.

Frank O. Evans, U. S. Atty., Floyd M. Buford, Asst. U. S. Atty., Macon, Ga., for plaintiff.

Cubbedge Snow, Sr., Martin, Snow, Grant & Napier, Macon, Ga., for defendant.

BOOTLE, District Judge.

The Commissioner of Internal Revenue here applies under section 7604 of the Internal Revenue Code of 1954, 26 U.S. C.A. § 7604, for an order enforcing a summons of a special agent of the Internal Revenue Service issued and served under authority of sections 7602 and 7603 of said Code, 26 U.S.C.A. §§ 7602, 7603, requiring respondent, as a witness, to give testimony in an income tax investigation.

From the pleadings and evidence, these are the material and controlling facts. The special agent is conducting an investigation to determine the correct tax liability of an individual taxpayer for the years 1951 through 1955. The respondent, a certified public accountant, has been employed by the taxpayer for approximately eight years, the last seven of which have been in connection with the tax returns commencing for the year 1951. His employment was not by the year, nor by the month, but he has, at frequent intervals but with no fixed schedule, conferred with the taxpayer during each of said years for the purpose of assembling information in connection with the preparation of his returns for the years commencing with 1951, and to this end respondent and his employees have on many occasions made entries on the books and records of the taxpayer. Under authority of sections 7602 and 7603 of the Internal Revenue Code of 1954 the special agent served respondent with a Commissioner's summons requiring him to appear at the office of the Internal Revenue Service, Macon, Georgia, on April 29, 1959, and to testify regarding the income tax liability of the taxpayer. Respondent appeared at the appointed time and place accompanied by his attorney who stated that he was present to represent respondent as his counsel. The attorney also stated that he was counsel for the taxpayer in the income tax matters under investigation, having filed a power of attorney to represent the taxpayer before the Internal Revenue Service, which power of attorney had not and has not been revoked. Thereupon the special agent informed respondent and his counsel, in substance, that inasmuch as counsel selected and retained by respondent to represent him at the investigation was also counsel for the taxpayer in the income tax matters under investigation, respondent could not have said attorney present as his counsel when respondent's testimony was being taken, but that if respondent still desired to have counsel, he would be accorded a reasonable period in which to secure other counsel not retained by or connected with the taxpayer. Thereupon respondent declined to proceed with the taking of his testimony without the presence of said attorney.

The question for decision, therefore, is whether the right of a witness to have counsel for such an investigatory fact-finding proceeding includes the right to have counsel retained by or connected with the taxpayer whose tax liability is under investigation.

The right "to be accompanied, represented, and advised by counsel" at such a hearing comes not from the Constitution which says that "in all criminal prosecutions, the accused shall enjoy the right * * * to have the Assistance of Counsel for his defence", U.S.Const. Amend. VI, but from the Administrative Procedure Act of June 11, 1946, 5 U.S. C.A. § 1005(a), and did not exist prior thereto. Bowles v. Baer, 7 Cir., 1944, 142 F.2d 787. There is no criminal prosecution here, no accused, not even a hearing, only an investigatory fact-finding proceeding. Torras v. Stradley, D.C. N.D.Ga.1951, 103 F.Supp. 737, 739. Cases like Glasser v. United States, 1942, 315 U.S. 60, 62 S.Ct. 457, 86 L.Ed. 680; Powell v. State of Alabama, 1932, 287 U.S. 45, 53 S.Ct. 55, 77 L.Ed. 158 and United States v. Bergamo, 3 Cir., 1946, 154 F.2d 31, holding that in criminal prosecutions the accused has the right to counsel of his own choosing are not controlling. It may be noted in passing that such right, while of highest priority, utmost importance and quite sacred, cannot, it has been held, "be insisted upon in a manner that will obstruct an orderly procedure in courts of justice, and deprive such courts of the exercise of their inherent powers to control the same." Lee v. United States, 1956, 98 U.S.App. D.C. 272, 235 F.2d 219, 221; Smith v. United States, 1923, 53 App.D.C. 53, 288 F. 259, 260-261. Even prior to the Administrative Procedure Act Treasury policy accorded to a witness in...