Ryan v. C. I. R., No. 74-1663

CourtUnited States Courts of Appeals. United States Court of Appeals (7th Circuit)
Writing for the CourtBefore SWYGERT and TONE, Circuit Judges, and PERRY; PERRY
Parties75-1 USTC P 9478 Raymond J. RYAN and Helen Ryan, Petitioners-Appellants, v. COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellee.
Docket NumberNo. 74-1663
Decision Date23 May 1975

Page 13

517 F.2d 13
75-1 USTC P 9478
Raymond J. RYAN and Helen Ryan, Petitioners-Appellants,
v.
COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellee.
No. 74-1663.
United States Court of Appeals,
Seventh Circuit.
Argued Feb. 26, 1975.
Decided May 23, 1975.

Page 14

Raymond G. Larroca, Washington, D. C., George C. Barnett, Evansville, Ind., for petitioners-appellants.

Scott P. Crampton, Asst. Atty. Gen., and Richard M. Roberts, Atty., Tax Div., Dept. of Justice, Washington, D. C., for respondent-appellee.

Before SWYGERT and TONE, Circuit Judges, and PERRY, Senior District Judge. *

PERRY, Senior District Judge.

This is an appeal from an order of the United States Tax Court which directed petitioners below, Raymond J. Ryan and Helen Ryan, his wife (hereinafter "the Ryans"), to answer certain interrogatories served by respondent below, the Commissioner of Internal Revenue (hereinafter "the Commissioner").

In 1964 the Commissioner instituted an investigation of the possible tax liabilities of petitioner Raymond J. Ryan (hereinafter "Ryan"). This investigation resulted in three successive indictments against Ryan for conspiracy to defraud the Internal Revenue Service, obstruction of justice, criminal contempt, and violation of the Foreign Direct Investment Act. Ryan was acquitted on the first two indictments (United States v. Ryan, 455 F.2d 728 (9th Cir. 1972); In the Matter of Ryan, Misc. No. 1926, May 4, 1972 (C.D.Cal.)); the third indictment was dismissed by the United States District Court and an appeal noticed by the Government was dropped several months thereafter (United States v. Ryan, D.D.C. No. Cr 2038-72, March 2, 1973, appeal dismissed, United States Court of Appeals, D.C.Cir. No. 73-1354, July 13, 1973). In June of 1969, while the criminal investigation was in progress, the Commissioner filed a jeopardy assessment

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of more than nine million dollars against the Ryans.

The Ryans initiated the proceedings below in September of 1969 by filing a petition in the Tax Court for a redetermination of deficiencies in income taxes, including fraud penalties, asserted by the Commissioner for the taxable years 1958 through 1965. The jeopardy assessment was dissolved after the Ryans filed the aforesaid petition and agreed to the imposition of certain encumbrances on their assets and certain limitations upon their right to travel.

In October of 1971 the Commissioner applied to the Tax Court for an order permitting him to take depositions, upon written interrogatories, of unnamed bank officials in Switzerland, pursuant to the Double Taxation Convention of 1951 entered into between the United States of America and Switzerland. The Ryans objected on the grounds, inter alia, that said Convention did not authorize such depositions and that the rules of the Tax Court then in force did not permit discovery by either party. The Tax Court granted the Commissioner's application, and this Court dismissed the Ryans' appeal for lack of jurisdiction and denied an alternative petition for mandamus. Ryan v. Commissioner of Internal Revenue, Nos. 72-1869 and 72-1870, United States Court of Appeals, 7th Cir., Jan. 5, 1973, and Ryan v. Drennen, No. 72-2006, Jan. 5, 1973, cert. denied, 412 U.S. 939, 93 S.Ct. 2774, 37 L.Ed.2d 398 (1973).

On January 18, 1974 the Commissioner, pursuant to Rule 71 of the new Tax Court Rules of Practice and Procedure, 1 served on the Ryans seven written interrogatories seeking information as to any relationships or dealings by the Ryans with the Commercial Credit Bank of Zurich, Switzerland, or with one Carl W. Hirschmann, a resident of Zurich, between the years 1958 and 1965. The Ryans objected to these interrogatories on the ground, inter alia, that answers to the interrogatories would have a tendency to incriminate them and hence were privileged by the Fifth Amendment. In support of their objection, the Ryans asserted: (1) a massive criminal tax investigation of the Ryans had been conducted for more than 10 years; (2) Ryan had been the subject of successive criminal prosecutions beginning in 1968, the latest of which was concluded only in 1973; (3) each criminal prosecution against Ryan involved alleged foreign transactions; and (4) each of the foreign transactions involved in the prior criminal prosecutions is also involved in the Commissioner's determination of deficiencies now before the Tax Court.

The Commissioner moved the Tax Court to compel answers to the interrogatories and, after a hearing conducted on May 22, 1974, the Tax Court on May 24, 1974 entered an order providing, inter alia, "Petitioners are directed to answer in writing and under oath" the interrogatories propounded by the Commissioner. The Ryans appealed to this Court and subsequently filed in this Court a petition for writ of mandamus, seeking an order directing the Chief Judge of the Tax Court to vacate the order of May 24, 1974. In its response to said petition for mandamus, the Government advised us that after the appeal and mandamus petition were docketed in this Court, the Government sought and obtained from the District Court for the District of Columbia an immunity order under 18 U.S.C. §§ 6002 and 6003. This order directed the Ryans "to give testimony or provide other information and produce documents which they refuse to give or to provide on the basis of their privilege against self-incrimination as to all matters about which they may be interrogated before the United States Tax Court", and granted the Ryans use immunity with respect to testimony or other information compelled to be given or produced under the order (or any information directly or indirectly derived from such

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testimony or other information). An appeal by the Ryans from the use immunity order is pending in the United States Court of Appeals for the District of Columbia Circuit.

This Court on August 21, 1974 denied the Ryans' petition for a writ of mandamus. Thereafter the Commissioner filed a motion to dismiss the instant appeal for lack of jurisdiction and, in the alternative, for mootness. This Court denied the motion, without prejudice to the Commissioner's right to raise the same issues in his brief on appeal.

One or both of two threshold issues must be addressed at the outset. We must first decide whether this Court has jurisdiction to entertain this appeal from the order of the Tax Court directing the Ryans to answer the interrogatories served upon them by the Commissioner. If we decide that this Court has such jurisdiction, we must further decide whether this appeal has become moot by virtue of the use immunity granted to the Ryans by the order of the District Court entered on August 8, 1974 pursuant to 18 U.S.C. §§ 6002 and 6003.

By the Internal Revenue Code of 1954, 26 U.S.C. § 7482(a), the Congress has granted United States Courts of Appeals exclusive jurisdiction to review the decisions of the Tax Court in the same manner and to the same extent as decisions of the District Courts in civil actions tried without a jury. As a general rule Courts of Appeals have jurisdiction to review only final decisions of the District Courts, 28 U.S.C. § 1291, and the courts have held that the term "final decisions" with respect to Tax Court cases generally includes decisions which specify the amount of a deficiency or lack thereof, dismiss a petition for lack of jurisdiction, or otherwise dispose of the litigation. Licavoli v. Commissioner, 318 F.2d 281, 283 (6th Cir. 1963); Porter v. Commissioner, 453 F.2d 1231, 1232 (5th Cir. 1972); Commissioner v. S. Frieder & Sons Co., 228 F.2d 478, 480 (3rd Cir. 1955). By 28 U.S.C. § 1292, Courts of Appeals are empowered to review certain interlocutory decisions of District Courts, but the Ryans have not contended that any of these exceptional interlocutory decisions are applicable in the case at bar.

In Cogen v. United States, 278 U.S. 221, 49 S.Ct. 118, 73 L.Ed. 275 (1929), Cogen had been indicted on a charge of conspiracy to violate the National Prohibition Act. Before the indictment, certain papers had been taken from his person...

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34 practice notes
  • National Super Spuds, Inc. v. New York Mercantile Exchange, Nos. 343
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • January 17, 1979
    ...993, 996-97 (10 Cir.), Cert. denied, 380 U.S. 964 (85 S.Ct. 1110, 14 L.Ed.2d 155) (1965) as four other circuits have done, Ryan v. CIR, 517 F.2d 13, 18-20 (7 Cir.), Cert. denied, 423 U.S. 892 (96 S.Ct. 190, 46 L.Ed.2d 124) (1975); Gialde v. Time, Inc., 480 F.2d 1295, 1300-01 (8 Cir. 1973); ......
  • Kaufman v. Edelstein, Nos. 934
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • April 20, 1976
    ...993, 996-97 (10 Cir.), cert. denied, 380 U.S. 964, 85 S.Ct. 1110, 14 L.Ed.2d 155 (1965) as four other circuits have done, Ryan v. CIR, 517 F.2d 13, 18-20 (7 Cir.), cert. denied, 423 U.S. 892, 96 S.Ct. 190, 46 L.Ed.2d 124 (1975); Gialde v. Time, Inc., 480 F.2d 1295, 1300-01 (8 Cir. 1973); Un......
  • U.S. v. Kis, Nos. 80-1710
    • United States
    • United States Courts of Appeals. United States Court of Appeals (7th Circuit)
    • November 17, 1981
    ...60 S.Ct. 540, 84 L.Ed. 783 (1940); Alexander v. United States, 201 U.S. 117, 26 S.Ct. 356, 50 L.Ed. 686 (1906). 16 Ryan v. Commissioner, 517 F.2d 13, 18-20 (7th Cir.), cert. denied, 423 U.S. 892, 96 S.Ct. 190, 46 L.Ed.2d 124 (1975); Grinnell Corp. v. Hackett, 519 F.2d 595, 596-98 (1st Cir.)......
  • United States v. Harrod, No. 79-931.
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    • District of Columbia Court of Appeals of Columbia District
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    ...Alexander doctrine; several of these cases involved constitutionally-based claims of privilege. See, e. g., Ryan v. Commissioner, 517 F.2d 13, 18-20 (7th Cir.), cert. denied, 423 U.S. 892, 96 S.Ct. 190, 46 L.Ed.2d 124 (1975) (Fifth Amendment claim against self-incrimination); Gialde v. Time......
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34 cases
  • United States v. Harrod, No. 79-931.
    • United States
    • District of Columbia Court of Appeals of Columbia District
    • February 24, 1981
    ...Alexander doctrine; several of these cases involved constitutionally-based claims of privilege. See, e. g., Ryan v. Commissioner, 517 F.2d 13, 18-20 (7th Cir.), cert. denied, 423 U.S. 892, 96 S.Ct. 190, 46 L.Ed.2d 124 (1975) (Fifth Amendment claim against self-incrimination); Gialde v. Time......
  • Kaufman v. Edelstein, Nos. 934
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • April 20, 1976
    ...993, 996-97 (10 Cir.), cert. denied, 380 U.S. 964, 85 S.Ct. 1110, 14 L.Ed.2d 155 (1965) as four other circuits have done, Ryan v. CIR, 517 F.2d 13, 18-20 (7 Cir.), cert. denied, 423 U.S. 892, 96 S.Ct. 190, 46 L.Ed.2d 124 (1975); Gialde v. Time, Inc., 480 F.2d 1295, 1300-01 (8 Cir. 1973); Un......
  • Marrese v. American Academy of Orthopaedic Surgeons, Nos. 81-2671
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    • January 10, 1984
    ...the contempt judgment. United States v. Ryan, 402 U.S. 530, 532-33, 91 S.Ct. 1580, 1581-82, 29 L.Ed.2d 85 (1971); Ryan v. Commissioner, 517 F.2d 13, 19-20 (7th Cir.1975); Hanley v. James McHugh Construction Co., 419 F.2d 955, 957 (7th Cir.1969). Cf. National Utility Service, Inc. v. Northwe......
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    ...(10 Cir.), cert. denied, 380 U.S. 964, 85 S.Ct. 1110, 14 L.Ed.2d 155 (1965)--as four other circuits have done, [467 A.2d 490] Ryan v. CIR, 517 F.2d 13, 18-20 (7 Cir.), cert. denied, 423 U.S. 892, 96 S.Ct. 190, 46 L.Ed.2d 124 (1975); Gialde v. Time, Inc., 480 F.2d 1295, 1300-01 (8 Cir.1973);......
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