U.S. v. Clark

• Citation: 574 F.Supp.2d 262
• Decision Date: 29 August 2008
• Docket Number: Civ. No. 3:06mc67 (MRK).,Civ. No. 3:06mc68 (MRK).
• Parties: UNITED STATES of America, Petitioner, v. Gordon CLARK, Respondent.
• Court: U.S. District Court — District of Connecticut

574 F.Supp.2d 262

UNITED STATES of America, Petitioner, v. Gordon CLARK, Respondent.

Civ. No. 3:06mc67 (MRK).

Civ. No. 3:06mc68 (MRK).

United States District Court, D. Connecticut.

August 29, 2008.

COPYRIGHT MATERIAL OMITTED

Alan M. Soloway, U.S. Attorney's Office, New Haven, CT, for Petitioner.

Gordon A. Clark, Enfield, CT, pro se.

RULING AND ORDER

MARK R. KRAVITZ, District Judge.

On March 9, 2006, the United States filed two Petitions to Enforce Internal Revenue Service ("IRS") Summons [doc. # 1] along with a declaration of IRS Revenue Officer Tom Dobruck [06mc67, doc. # 1, 06mc67, doc. # 2] ("Dobruck Declaration"). According to the Petitions and the Dobruck Declaration, the IRS is conducting an investigation into the tax liability of the Respondent, Gordon Clark, for the years 1999-2001 and 2003-2004. In connection with this investigation, the IRS served a summons upon Mr. Clark on August 23, 2005; Mr. Clark failed to appear. Upon the filing of the Petitions, Magistrate Judge Joan G. Margolis issued an Order to Show Cause [06mc67, doc. # 2, 06mc67, doc. # 3]. A Show Cause Hearing was held on May 7, 2007, during which Mr. Clark made another oral Motion to Dismiss [06mc67, doc. # 26, 06mc67, doc. # 27].

On September 25, 2007, Magistrate Judge Margolis issued a ruling, see Ruling Denying Motion to Dismiss [doc. # 32], recommending that Mr. Clark's Motions to Dismiss be denied. She issued an Order of Enforcement and Judgment [doc. # 33], which required Mr. Clark to appear before Revenue Officer Dobruck at the Office of the Internal Revenue Service on October 30, 2007. Mr. Clark filed an objection to the Recommended Ruling [doc. # 35] and a flurry of other Motions. Only two of these Motions are still pending before the Court—Mr. Clark's Motion to Appear before a Constitutional Article III Court [doc. # 40] and his Motion for Proper Constitutional Ruling by a Constitutional Article III Court and Article III Judge on All Previously Denied Motions and on All Future Motions and Rulings by Gordon A. Clark [doc. # 55]. Mr. Clark moved for an emergency stay of the Order of Enforcement and Judgment [doc. # 49] on October 30, 2007, which was granted. He then filed a second Objection to the Recommended Ruling [doc. # 56].

I.

Having carefully considered Respondent's Objections and having conducted the de novo review upon the record required by 28 U.S.C. § 636(b)(1), the Court hereby adopts the well-reasoned and thorough Recommended Ruling of the Magistrate Judge. Contrary to Mr. Clark's assertions, the Secretary of the Treasury and the IRS have authority to issue summonses. See 26 U.S.C. § 7602 (2000). The IRS has, in turn, has delegated that authority to Revenue Officer Dobruck. See 26 C.F.R. 301.7701-9 (2000); IRS Delegation Order No. 4 Rev. 22, 1997 WL 33479254 (Aug. 18, 1997). Also contrary to Mr. Clark's assertions, this Court has subject matter jurisdiction pursuant to 26 U.S.C. § 7604(a) (2000) and 26 U.S.C. § 7402(b) (2000) to enforce the summons. See Church of Scientology v. United States, 506 U.S. 9, 12, 113 S.Ct. 447, 121 L.Ed.2d 313 (1992).

Furthermore, the IRS has established a prima facie case for enforcement. In order to obtain enforcement of a summons, the IRS must demonstrate that "[(1)] the investigation will be conducted pursuant to a legitimate purpose, [(2)] that the inquiry may be relevant to the purpose, [(3)] that the information sought is not already within the Commissioner's possession, [and (4)] that the administrative steps required by the Code have been followed...." United States v. Powell, 379 U.S. 48, 85 S.Ct. 248, 13 L.Ed.2d 112 (1964); see also Adamowicz v. United States, 531 F.3d 151, 156 (2d Cir.2008). Magistrate Judge Margolis held (and this Court adopts the holding) that the IRS had satisfied all four Powell elements. The IRS's "burden of proof of its compliance with the Powell standards is minimal," United States v. White, 853 F.2d 107, 111 (2d Cir.1988), and the IRS may "establish its prima facie case by the affidavit of an agent involved in the investigation averring each Powell element." Id. Here, Revenue Officer Dobruck has attested to all four Powell elements.

Once the IRS has satisfied the Powell factors, the burden shifts to Respondent to the burden shifts to the taxpayer to "disprove one of the four Powell criteria, or to demonstrate that judicial enforcement would be an abuse of the court's process." Adamowicz, 531 F.3d at 156. The Court agrees with Magistrate Judge Margolis that Mr. Clark, has not met his burden. Although Mr. Clark makes claims of constitutional deprivations, treason and generalized abuses of power, "mere conclusory allegations of wrongdoing unsupported by any evidence from which a court might draw an inference of abuse are insufficient to rebut the government's prima facie showing of a proper investigatory purpose...." Id. at 160. The Court, therefore, adopts Magistrate Judge Margolis' recommended ruling and rejects Mr. Clark's Objections.

II.

Mr. Clark's final argument is that complying with the summons would deprive him of his Fourth Amendment right to be free from unreasonable searches and seizures and his Fifth Amendment right against self-incrimination. The Court adopts Magistrate Judge Margolis' recommended ruling that enforcement of the IRS summons does not violate Mr. Clark's Fourth Amendment rights. Courts have repeatedly recognized that "enforcement of an IRS summons does not violate the fourth amendment as long as the IRS has complied with the Powell requirements." United States v. Reis, 765 F.2d 1094, 1096 (11th Cir.1985); see also Fisher v. United States, 425 U.S. 391, 401 n. 7, 96 S.Ct. 1569, 48 L.Ed.2d 39 (1976) (stating that although taxpayers had not raised any Fourth Amendment arguments, they "could not be successful if they had. The summonses are narrowly drawn and seek only documents of unquestionable relevance to the tax investigation"); United States v. Abrahams, 905 F.2d 1276, 1282 (9th Cir.1990) ("[S]atisfaction of the Powell requirements serve[s] to ensure that the summons d[oes] not violate the fourth amendment by lacking sufficient cause."), overruled on other grounds by United States v. Jose, 131 F.3d 1325, 1329 (9th Cir.1997) (en banc); United States v. Theep, 502 F.2d 797, 798 (9th Cir.1974) ("the unlawful search and seizure provisions of the Fourth Amendment do not protect the taxpayer from an IRS summons"); United States v. Roundtree, 420 F.2d 845, 847-50 (5th Cir.1969); United States v. Hopper, No. 05-MC-172, 2005 WL 3277778, *2 (E.D.N.Y. Oct. 29, 2005); Muratore v. Department of Treasury, 315 F.Supp.2d 305, 311 (W.D.N.Y.2004). Here, because the Court finds that the IRS has satisfied the Powell requirements, there is no Fourth Amendment violation.

Mr. Clark's invocation of the Fifth Amendment right against self-incrimination presents a more complex issue. The IRS summons in this case ordered Mr. Clark to produce documents and to provide testimony about the tax years in question. The Fifth Amendment undoubtedly applies to compelled testimony sought during the course of an IRS investigation. As the Second Circuit has explained, "even a routine tax investigation is a situation in which answers to questions by an IRS agent might tend to incriminate, and thus Fifth Amendment rights apply to such answers." United States v. Fox, 721 F.2d 32, 33 (2d Cir.1983); see also United States v. Edgerton, 734 F.2d 913, 919-20 (2d Cir. 1984).

By contrast, the Fifth Amendment privilege against self-incrimination generally does not apply to incriminating documents; instead, it applies only to "testimonial communication that is incriminating." Fisher v. United States, 425 U.S. 391, 408, 96 S.Ct. 1569, 48 L.Ed.2d 39 (1976) (emphasis added). This is true whether the documents at issue were prepared by Mr. Clark's accountant, see Fisher, 425 U.S. at 409, 96 S.Ct. 1569, or whether they are Mr. Clark's own personal records, see In Re: Grand Jury Subpoena Duces Tecum, 1 F.3d 87, 90 (2d Cir.1993) ("While we have previously left undecided the question of whether the Fifth Amendment protects the contents of private papers that are not business documents, we now rule that it does not.") (citations and quotation marks omitted); see also United States v. Doe, 465 U.S. 605, 612 n. 10, 104 S.Ct. 1237, 79 L.Ed.2d 552 (1984) ("If the party asserting the Fifth Amendment privilege has voluntarily compiled the document, no compulsion is present and the contents of the document are not privileged.").

Even though the contents of a document may not be privileged, the Fifth Amendment does protect the "`communicative aspects of the act of production.'" United States v. Fox, 721 F.2d 32 36 (2d Cir.1983) (citing Fisher, 425 U.S. at 410, 96 S.Ct. 1569). In other words, in some cases, the mere act of producing a document might compel incriminating testimony. Compliance with a summons

may require `incriminating testimony' in two situations: (1) If the existence and location of the subpoenaed documents are unknown to the government, then the taxpayer's compelled production of those documents `tacitly concedes the existence of the papers demanded and their possession or control by the taxpayer'; and (2) where the taxpayer's production of documents may `implicitly authenticate' the documents.

Fox, 721 F.2d at 38; see also In Re Grand Jury Subpoena, 256 Fed. Appx. 379, 381 (2d Cir.2007). However, there is an important exception to the "communicative aspects" doctrine when the documents in question are "required records." See In re Two Grand Jury Subpoenae Duces Tecum, 793 F.2d 69, 73 (2d Cir.1986) ("[T]he [required records] exception overrides the privilege against self-incrimination in situations in which the privilege would otherwise apply; that is, even if the compelled act of producing the required records might be testimonial and incriminating."). To constitute "required records," a document must satisfy a three-part test: "(1) the requirement that th...