U.S. v. Bray

Citation546 F.2d 851
Decision Date06 December 1976
Docket NumberNo. 75-1932,75-1932
Parties76-2 USTC P 9804 UNITED STATES of America, Plaintiff-Appellee, v. Karl J. BRAY, Defendant-Appellant.
CourtU.S. Court of Appeals — Tenth Circuit

Max D. Wheeler, Asst. U. S. Atty., Salt Lake City, Utah (Ramon M. Child, U. S. Atty., Salt Lake City, Utah, on the brief), for plaintiff-appellee.

James N. Barber, Meredith, Barber & Day, Salt Lake City, Utah, for defendant-appellant.

Before SETH, BREITENSTEIN and BARRETT, Circuit Judges.

BARRETT, Circuit Judge.

Karl J. Bray (Bray) appeals from a jury conviction of violating 26 U.S.C.A. § 7203 (wilful failure to file an income tax return) and 26 U.S.C.A. § 7205 (wilful falsification of a tax withholding statement).

Bray is a tax protester. He authored a booklet entitled "Taxation and Tyranny," which is, allegedly, "the complete guide to the tax rebellion." It "describes the tactics that particular Americans are using to stop the unjust, unconstitutional, and tyrannical practices of the I.R.S."

Bray's 1972 federal income tax return did not contain any relevant information of his earnings. Rather, the return was inscribed: "5th Amendment. Go to Hell; do not pass go; do not collect $200 dollars." On appeal Bray admits that he did not comply with the general filing requirements of the Internal Revenue Code (Code) and that he claimed 15 exemptions, even though he was entitled only to one.

The Government introduced an overwhelming quantity of evidence relative to Bray's taxable income for the year 1972. The parties stipulated that $2,050 was the amount of gross income required as a precondition of Bray's duty to file. In proving Bray's 1972 income the Government introduced payroll records, bank account identification cards, bank account statements and numerous copies of cancelled checks. These records and documents were utilized to reconstruct Bray's income in accordance with the "bank deposits and cash expenditures" method of proof.

Bray testified in his defense. He contended that he was justified in not filing a proper return and in inflating the number of his exemptions because: he thought he was under investigation for criminal violations of the Code and that filing a return would tend to incriminate him in violation of his Fifth Amendment rights; he was not satisfied that he had taxable income in excess of $2,050; he felt that the only way he could require the United States Government to stop withholding taxes was to inflate the number of his claimed exemptions; his personal filing with the Internal Revenue Service "had been designed as political protests designed as good faith challenges" On appeal Bray contends that the Court erred in: (1) refusing to suppress evidence secured by administrative summons; (2) permitting the Government to establish his 1972 income by the "bank deposits and cash disbursements" method of proof; and (3) in refusing to disqualify itself for personal bias and prejudice.

of that which he viewed as unconstitutional and "bad laws."


Bray contends that the Court erred in refusing to suppress evidence procured by the Internal Revenue Service (IRS) by administrative summonses issued pursuant to 26 U.S.C.A. § 7602, which provides in pertinent part:

For the purposes of ascertaining the correctness of any return, making a return where none has been made, determining the liability of any person for any internal revenue tax or the liability at law or in equity of any transferee or fiduciary of any person in respect of any internal revenue tax, or collecting any such liability, the Secretary or his delegate is authorized

(1) To examine any books, papers, records, or other data which may be relevant or material to such inquiry;

(2) To summon the person liable for tax or required to perform the act . . . or any person having possession, custody, or care of books of account containing entries relating to the business of the person liable for tax or required to perform the act, . . .

Bray concedes that Section 7602 may be properly utilized for the joint purpose of acquiring information for the establishment of civil tax liability or collection as well as the possibility of criminal prosecution. Bray contends, however, that in this case the sole purpose of the summons was aimed at the procurement of evidence against him for purposes of criminal prosecution. On this predicate, Bray argues that the summons is not enforceable. We agree that an administrative summons may not be enforced if the sole purpose therefor is that of obtaining evidence for purposes of criminal prosecution. We hold, however, that based upon the facts presented in this record, the summonses were properly employed. No abuses occurred.

The record clearly demonstrates that the IRS investigation of Bray and the Service's related use of administrative summonses were not undertaken for the sole purpose of obtaining evidence for criminal prosecution of Bray. Bray's cross-examination of Special Agent Harkness is significant to this dispute:

Q. What is the purpose of your job?

A. Well, my purpose of my job is to determine the tax liability of an individual and also determine if there are possible criminal violations of the Internal Revenue Code.

Q. It is a fact, is it not, that these two aspects of your job are integrally related and that the purpose of determining tax liability as far as your job is concerned, is to determine criminal liability, is that true?

A. I have to determine tax liability before I can determine whether there is a criminal violation, yes.

Donaldson v. United States, 400 U.S. 517, 91 S.Ct. 534, 27 L.Ed.2d 580 (1971), supports our holding that the summonses were properly utilized in the case at bar:

We note initially that . . . the courts of appeals in opinions . . . appear uniformly to approve the use of a summons in an investigation that is likely to lead to civil liability as well as to criminal prosecution. . . . On the other hand, it has been said,. . . that where the sole objective of the investigation is to obtain evidence for use in a criminal prosecution, the purpose is not a legitimate one and enforcement may be denied. This, of course, would likely be the case where a criminal prosecution has been instituted and is pending at the time of the issuance of the summons.

400 U.S., at 532-533, 91 S.Ct. at 543.

We hold that under § 7602 an internal revenue summons may be issued in aid of an investigation if it is issued in good faith and prior to the recommendation for criminal prosecution.

400 U.S., at 536, 91 S.Ct. at 545.

Although not directly raised by Bray, the Government contends that not only were the summonses properly authorized and executed, but that Bray was without standing to challenge their issuance and usage. The Government contends that inasmuch as the summonses were issued to corporations or individuals doing business with Bray, and that none were issued to Bray or aimed at records in Bray's possession, that Bray has no standing to assert the Fifth Amendment privilege. The proposition that the Fifth Amendment prevented compelled production of documents over the objection of the rightful claimant that such production might incriminate him had its origin in Boyd v. United States, 116 U.S. 616, 6 S.Ct. 524, 29 L.Ed. 746 (1886). The application of the Boyd rule was laid to rest in the recent United States Supreme Court opinion entitled Fisher, et al. v. United States, et al.; United States, et al. v. Kasmir, et al. 425 U.S. 391, 96 S.Ct. 1569, 48 L.Ed.2d 39 (1976) where the Court upheld administrative summonses directing attorneys for the respective taxpayers to deliver over certain documents such as accountants' analyses of the taxpayers' income and expenses, work papers, retained copies of prior income tax returns, reports, correspondence, and other records of the accountants which had been delivered to the respective attorneys by the accountants employed by the taxpayers, at the specific direction of the taxpayers. In each case, the Internal Revenue Service had interviewed the taxpayers in connection with an investigation of possible civil or criminal liability under the federal income tax laws before the documents were delivered to the taxpayers' attorneys. The taxpayers invoked the Fifth Amendment privilege against self-incrimination and the attorney-client privilege. The Supreme Court rejected both contentions in holding that the subpoenae are enforceable and that directing a taxpayer to produce his accountant's documents, etc. relating to his tax affairs would not involve incriminating testimony within the protection of the Fifth Amendment because (a) under such circumstances the taxpayer-accused is not compelled to make any testimonial communication and (b) the accountants' documents, etc., are not the "private papers" of the taxpayers but are the contents of the accountants' work papers and do not, therefore, involve testimonial self-incrimination, however incriminating the contents may be.

By analogy, we have held that there is no violation, per se, of one's Fifth Amendment privilege against self-incrimination by reason of the proper execution by special agents of the IRS of a valid search and seizure warrant seeking fiscal and business records relating to income and expenses in the possession of taxpayers in the course of an IRS investigation of their income tax liabilities before any criminal charges had been filed. Shaffer v. Wilson, 523 F.2d 175 (10th Cir. 1975). In Shaffer we referred with favor to United States v. Blank, 459 F.2d 383 (6th Cir. 1972), cert. denied, 409 U.S. 887, 93 S.Ct. 111, 34 L.Ed.2d 143 (1972), where the Court made these observations relative to the element of "compulsion" in relation to records, etc. obtained from the taxpayer by administrative summons (subpoena) as distinguished from those obtained via a valid search warrant:

. . . The subpoena compels the person receiving it by his own response to identify...

To continue reading

Request your trial
140 cases
  • Blakely v. USAA Cas. Ins. Co.
    • United States
    • U.S. District Court — District of Utah
    • 10 Diciembre 2012
    ...establish simply that the affiant does not like a particular judge are not adequate to require disqualification.United States v. Bray, 546 F.2d 851, 857 (10th Cir. 1976) (citations omitted). In order to be sufficient, the § 144 affidavit must state facts and reasons which "'give fair suppor......
  • U.S. v. Genser
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • 29 Agosto 1978
    ...a defendant received certain payments in cash which were not in turn reported on income tax returns. See, e. g., United States v. Bray, 546 F.2d 851 (10th Cir. 1976); United States v. Stein, 437 F.2d 775 (7th Cir.), Cert. denied, 403 U.S. 905, 91 S.Ct. 2205, 29 L.Ed.2d 680 (1971).2 The gove......
  • Spine v. US
    • United States
    • U.S. District Court — Southern District of Ohio
    • 25 Junio 1987
    ...v. Powell, 379 U.S. 48, 85 S.Ct. 248, 13 L.Ed.2d 112 (1964); United States v. Morgan, 761 F.2d 1009 (4th Cir. 1985); United States v. Bray, 546 F.2d 851 (10th Cir.1976); United States v. Sun First National Bank of Orlando, 510 F.2d 1107 (5th Cir.), cert. denied, 423 U.S. 927, 96 S.Ct. 273, ......
  • Smallwood v. State
    • United States
    • United States State Supreme Court of Wyoming
    • 28 Marzo 1989
    ...United States v. Holland, 655 F.2d 44 (5th Cir.1981); Webbe v. McGhie Land Title Co., 549 F.2d 1358 (10th Cir.1977); United States v. Bray, 546 F.2d 851 (10th Cir.1976); Peacock Records, Inc. v. Checker Records, Inc., 430 F.2d 85 (7th Cir.1970), cert. denied 401 U.S. 975, 91 S.Ct. 1193, 28 ......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT