In re Turner

• Decision Date: 11 October 1962
• Docket Number: No. 102,Docket 27621.,102
• Parties: In the Matter of the Tax Liability of Reuben TURNER, Appellant.
• Court: U.S. Court of Appeals — Second Circuit

309 F.2d 69 (1962)

In the Matter of the Tax Liability of Reuben TURNER, Appellant.

No. 102, Docket 27621.

United States Court of Appeals Second Circuit.

Argued October 5, 1962.

Decided October 11, 1962.

Jules Ritholz, New York City (Corcoran, Kostelanetz, Gladstone & Lowell) New York City (Boris Kostelanetz, Jon H. Hammer, New York City, of counsel), for appellant.

Philip H. Schaeffer, New York City, Vincent L. Broderick, U. S. Atty., for Southern District of New York.

Eugene R. Anderson, Asst. U. S. Atty., of counsel, for the United States of America.

Before LUMBARD, Chief Judge, and FRIENDLY and KAUFMAN, Circuit Judges.

FRIENDLY, Circuit Judge.

Turner, a physician, obtained on March 20, 1962, in the District Court for the Southern District of New York, an order relating to a summons issued to him under the authority of § 7602(2) of the Internal Revenue Code of 1954, 26 U.S.C.A. § 7602(2). The summons commanded Turner to appear before Special Agent Fensterman of the Internal Revenue Service on March 26, 1962, and to bring with him all records of income and expenses of his medical practice, all bank statements and cancelled checks, the names of all open and closed savings accounts and related deposit books, and the records of all other income and expenses for the years 1956 through 1959. The order directed the Internal Revenue Service to show cause why the summons should not be quashed or modified on the ground that the Special Agent was engaged in an investigation directed toward the institution of criminal proceedings against Turner, and that compelling Turner to appear and produce books and records before him would violate rights guaranteed to Turner by the Fourth and Fifth Amendments. Pending hearing and determination of the motion, enforcement of the summons was stayed. The Government submitted an affidavit of the Special Agent asserting that "The primary, although not the sole purpose, of the questions to be put to Reuben Turner, as well as the purposes for which the specified documents are sought, is to determine the authenticity and completeness of various types of income included in said returns." On April 26, 1962, Judge Bonsal denied relief, holding the application to be premature inasmuch as Turner could assert his constitutional rights upon appearing before the Special Agent. Turner appealed and, by stipulation, was relieved from complying with the summons in the interim. On October 1, 1962, the Government moved for a preference, and we heard the appeal on October 5. We affirm.

Any tax investigation carries with it at least a theoretical possibility of disclosing facts that might lead to criminal proceedings. Appellant does not take the extreme position that, because of this, all individual taxpayers are entitled to suppress all summonses issued to them under § 7602(2). His claim is limited to taxpayers who are under investigation by Special Agents; these officials, he alleges, are exclusively concerned with cases where criminal prosecution is contemplated, cf. Russo v. United States, 241 F.2d 285, 286 fn. 1, (2 Cir. 1957), cert. denied, 355 U.S. 816, 78 S.Ct. 18, 2 L.Ed.2d 33 (1957). Even so, appellant does not press too strongly his argument that the summons is invalid insofar as it requires his oral testimony. His restraint in this respect is wise. Section 3481 of 18 U.S.C., whereby "a person charged" is made "a competent witness" only "at his own request", is concerned solely with "trial of all persons charged with the commission of offenses against the United States * * * *." During investigative proceedings that may or may not lead to indictment and trial, a prospective defendant whose testimony is sought is still only a witness and hence outside the scope of § 3481; like any other witness, he must obey the process of the authority summoning him to appear and claim the constitutional privilege as particular questions are asked. See United States v. Price, 163 F. 904 (S.D.N.Y.1908) (Hough, D. J.); Landy v. United States, 283 F.2d 303 (5 Cir. 1960), cert. denied, 365 U.S. 845, 81 S.Ct. 805, 5 L.Ed.2d 810 (1961); 8 Wigmore, Evidence (McNaughton rev. 1961), § 2268, at 405-406.

Appellant relies more heavily on his claim that the books, records and papers he has been summoned to bring to the hearing would necessarily fall within the privilege, and that the courts should therefore intervene in limine to prevent what would be a futile compulsion. Indeed, he argues that this issue has already been ruled in his favor by my brothers, sitting in the court below — by Judge Lumbard in Shaughnessy v. Bacolas, 135 F.Supp. 15 (S.D.N.Y. 1955), and by Judge Kaufman in In re Daniels, 140 F.Supp. 322 (S.D.N.Y. 1956). We do not read these decisions as establishing a general principle that a summons issued under § 7602(2), requiring an individual taxpayer to produce his books and records before a Special Agent of the Internal Revenue Service must always be vacated when attacked as violating the privilege against self-incrimination. Bacolas was not a tax case at all; it involved an administrative subpoena issued by a Special Inquiry Officer of the Immigration Service, under 8 U.S.C. § 1225(a), to a person believed to have paid out money to facilitate the illegal entry of an alien in violation of 8 U.S.C. § 1324(a) (4); Judge Lumbard placed his decision on the...