People v. Gutierrez

• Decision Date: 14 December 2009
• Docket Number: No. 09SA69.,09SA69.
• Parties: The PEOPLE of the State of Colorado, Plaintiff-Appellant v. Ramon Ricardo GUTIERREZ, Defendant-Appellee.
• Court: Colorado Supreme Court

222 P.3d 925

The PEOPLE of the State of Colorado, Plaintiff-Appellant v. Ramon Ricardo GUTIERREZ, Defendant-Appellee.

No. 09SA69.

Supreme Court of Colorado, En Banc.

December 14, 2009.

Kenneth R. Buck, District Attorney, Nineteenth Judicial District, Christian J. Schulte, Chief Deputy District Attorney, Michael J. Rourke, Assistant District Attorney, Greeley, Colorado, Attorneys for Plaintiff-Appellant.

Douglas K. Wilson, Public Defender, James Merson, Deputy Public Defender, Greeley, Colorado, Attorneys for Defendant-Appellee.

Justice BENDER delivered the Opinion of the Court.

I. Introduction

The district attorney brings this interlocutory appeal from the trial court's order granting defendant Ramon Gutierrez's motion to suppress evidence obtained from his tax returns and other documents contained in his client file, which was seized from the offices of his tax preparer. Gutierrez is charged with identity theft and criminal impersonation based on the information obtained from these tax records, which show that he reported income from work that he performed while providing his employer with a social security number registered to another person.

Gutierrez's client file was one of approximately 5,000 client files seized from Amalia's Tax and Translation Services ("Amalia's Tax Service"), in Greeley, Colorado, pursuant to a search warrant. The trial court found that the search warrant was invalid because it did not provide probable cause to believe that Gutierrez's client file contained evidence of a crime. Noting that the district attorney and the Weld County Sheriff's Department referred to the investigation as "Operation Numbers Game," the trial court described the search as "extraordinarily wide-sweeping," and concluded that it was "an exploratory search" designed to permit the sheriff to rummage through "the confidential records of thousands of persons based on nothing more than a suspicion that one or more of them may have committed a crime." The trial court also found that the good faith exception to the exclusionary rule did not apply because the affidavit was "so lacking in indicia of probable cause" that no reasonably cautious officer could have relied upon it. We agree. To hold otherwise in this case would allow the good faith exception to swallow the exclusionary rule and would permit state law enforcement to circumvent the Fourth Amendment as well as a complex federal statutory regime designed to protect taxpayers' privacy.

A taxpayer has a reasonable expectation of privacy in his or her tax return and supporting documentation such as a W-2 form. To overcome that expectation of privacy, a search warrant must show probable cause to believe that the tax records contain evidence of criminal wrongdoing by that taxpayer or the tax preparer. The warrant in the present case did not identify the tax preparer or Gutierrez as the target of the search. It made no showing of probable cause as to Gutierrez or any other client of Amalia's Tax Service. Rather, the warrant relied solely on the fact that Amalia's Tax Service prepared tax returns pursuant to the requirements of federal law, which permit a taxpayer who does not have a social security number to file a tax return using a taxpayer identification number.

The warrant in this case permitted an unbridled search conducted, as the trial court described, "with the hope of uncovering evidence of criminal activity, which practice seems more in line with the writs of assistance in colonial America."¹ We hold that the warrant here contravenes basic freedoms guaranteed by the Fourth Amendment. We also hold that the good faith exception does not apply because this warrant was so lacking in indicia of probable cause that no reasonably well-trained officer could have relied upon it. Hence, we affirm the trial court's suppression order, and we return this case to the trial court for proceedings consistent with this opinion.

II. Facts and Proceedings Below

To put this case in context, we briefly provide some background on income tax filing procedures followed by undocumented immigrants. Under federal law, any person who is physically present in the United States and earns an income is required to pay tax on that income, even if that person may not be authorized to work in the United States. See 26 U.S.C. § 7701 (2006). The Internal Revenue Service ("IRS") requires that taxpayers receive a unique identifying number. For most taxpayers this number is their social security number ("SSN"). See 26 C.F.R. § 301.6109-1 (2009). Most persons who are not authorized to work in the United States, however, may not obtain an SSN. 42 U.S.C. § 405(c) (2006). To ensure that unique identifying numbers are provided to all those who are obligated to pay taxes, the IRS requires taxpayers who are not eligible for an SSN to apply for an Individual Tax Identification Number ("ITIN"). 26 C.F.R. § 301.6109-1. It is important to note that many individuals issued ITINs are present in this country legally. ITINs are issued irrespective of immigration status because resident and nonresident aliens may have U.S. tax return and payment responsibilities under the Internal Revenue Code. See id.

In discussing the facts, we first describe the contents of the affidavit supporting the warrant. We then supplement this description with the trial court's findings, and other record sources, to provide a more complete picture of the events that transpired.

The affidavit supporting the search warrant reflects that the Weld County Sheriff's Department knew the following facts before applying for and executing the warrant. In August of 2008, the Weld County Sheriff's Department investigated an undocumented immigrant named Servando Trejo on charges of identity theft. Trejo admitted to investigators that he entered the country illegally, and, once here, he purchased a false name and SSN in order to obtain employment. In the course of the investigation, Trejo told investigators that he had filed income tax returns and that his returns were prepared and filed by Amalia's Tax Service, located in Greeley, Colorado. Trejo explained to investigators that, because he did not have an authentic SSN, he used an ITIN instead of an SSN when filing his return. He also explained that Amalia's Tax Service had helped him obtain the ITIN. Trejo told investigators that he "worked for several different companies in the [a]gricultural industry" and that "everyone knows to go to [Amalia's Tax Service] for their taxes."

Investigators also interviewed Amalia Cerrillo, owner and operator of Amalia's Tax Service. According to the affidavit, Cerrillo confirmed that she knowingly prepares tax returns for undocumented immigrants. The affidavit also states that Cerrillo said, "if people [are] applying for an ITIN they are illegal aliens" and that, of clients utilizing the ITIN process, "almost all" provide her with an SSN "that belongs to someone else."²

However, neither Cerrillo nor Trejo mention Gutierrez by name or otherwise refer to his client file. As the trial court found, "[t]here is absolutely no information contained in the affidavit that identifies the name or date of birth of any client of Amalia's Tax Service, other than that of Mr. Trejo." The trial court also noted that Amalia's Tax Service provided translation services and found that "the affidavit fails to state what percentage of [Amalia's Tax Service's] business was tax preparation and what percentage involved translation services, and whether [Cerrillo] had records in her [Greeley] office that just related to the translation business."

The affidavit states that, after interviewing Cerrillo and consulting with the department of revenue, the sheriff's office hypothesized that it could obtain evidence of identity theft and criminal impersonation if it looked through the files of each client and compared the identifying information on the client's Form 1040 with the client's wage earning documentation, such as a W-2 or Form 1099. According to this theory, if a client had supplied a fictitious SSN to an employer, then the client's Form 1040 would list an ITIN as the taxpayer identification number, whereas the client's wage earning documentation would contain the fictitious SSN. In other words, the identification numbers on the two forms would not match.³

According to the affidavit supporting the search warrant, the sheriff's office used this theory—that a mismatch of the client's ITIN and SSN would indicate that the client was using someone else's SSN—to support its search warrant for evidence of identity theft and criminal impersonation. Though directing a search of Amalia's Tax Service, the affidavit contains neither facts nor allegations linking Amalia's Tax Service to participation in any substantive state crime. All parties agreed at trial and before us that the affidavit did not allege or imply that the business had committed a crime.⁴ Instead this investigation, referred to as "Operation Numbers Game" by the district attorney and the Weld County Sheriff's Department, was supported by the officer's belief that some unknown number of the business's 5,000 clients had committed, or were committing, crimes. The warrant authorized investigators to seize, among other things, all tax returns for years 2006 and 2007 that were filed using an ITIN that did not match the SSN on the wage earning documentation. The trial court found that "law enforcement personnel arbitrarily chose the tax years 2006 and 2007, even though there was no information that [Amalia's Tax Service] filed tax returns using the methods outlined in the affidavit for either, both, or neither of those years."

According to the affidavit supporting the warrant for Gutierrez's arrest, when officers arrived at Amalia's Tax Service, they asked Cerrillo to help them locate the 2006 and 2007 tax returns and return information. Cerrillo explained to the officers that the information they sought was...