U.S. v. Johnson, s. 80-1822

Decision Date03 August 1981
Docket NumberNos. 80-1822,s. 80-1822
Citation652 F.2d 475
Parties81-2 USTC P 9605 UNITED STATES of America, et al., Plaintiffs-Appellees, v. Glenn H. JOHNSON, Defendant, William T. Gholson, Intervenor-Appellant. UNITED STATES of America, et al., Plaintiffs-Appellees, v. SUNILAND FURNITURE CO., et al., Defendants, William T. Gholson, Intervenor-Appellant. UNITED STATES of America, et al., Plaintiffs-Appellees, v. BANK OF the SOUTHWEST NATIONAL ASSOCIATION, et al., Defendants, William T. Gholson, Intervenor-Appellant. to 80-1824 Summary Calendar. . Unit A
CourtU.S. Court of Appeals — Fifth Circuit

Woody & Rosen, Clyde W. Woody, Andrew G. Shebay, Houston, Tex., for Gholson in all cases.

Robert Darden, Asst. U.S. Atty., Houston, Tex., M. Carr Ferguson, Asst. Atty. Gen., Michael L. Paup, Chief, Appellate Section, Tax Div., Dept. of Justice, Washington, D.C., for plaintiffs-appellees in all cases.

Appeals from the United States District Court for the Southern District of Texas.

Before AINSWORTH, GARZA and SAM D. JOHNSON, Circuit Judges.

PER CURIAM:

This appeal involves the enforcement of a number of I.R.S. summonses issued to the above named defendants pursuant to 26 U.S.C. § 7602. The summonses were issued to ascertain the correctness of intervenor-appellant William T. Gholson's tax returns for 1975, 1976 and 1977. After an evidentiary hearing, the district court found that the summonses had been validly issued and entered an order enforcing them.

The appellant Gholson challenges the decision in three respects. First, the appellant contends that the unavailability of the I.R.S. agent who issued the summonses was improper. Second, the appellant contends that he was not granted sufficient discovery to enable him to prove that the I.R.S. had made a decision to refer the investigation to the Department of Justice. Third, the appellant contends that he was not allowed sufficient latitude during the hearing to determine whether the I.R.S. was acting in good faith in issuing the summonses. The government also raises a challenge of its own, contending that these appeals are moot and should be dismissed.

Although the appellant requests this court to establish some sort of discovery guidelines for district courts to follow in enforcement hearings, prior case law controls our decision today. We have held that the method and scope of discovery allowed in summons enforcement proceedings are committed in large part to the discretion of the district court. United States v. Harris, 628 F.2d 875, 884 (5th Cir. 1980).

26 U.S.C. § 7602 grants the government wide ranging investigatory authority to examine any relevant materials and to summon persons to appear to testify concerning any relevant matter regarding the collection of taxes. The issuance of a § 7602 summons does not require probable cause, United States v. Harris, 628 F.2d at 879, but it does require the existence of good faith. United States v. Wyatt, 637 F.2d 293, 301 (5th Cir. 1981); United States v. First National Bank in Dallas, 635 F.2d 391, 396 (5th Cir. 1981). Good faith requires that the summons be issued for a purpose authorized by statute and prior to the I.R.S.'s recommendation to the Department of Justice for criminal prosecution. United States v. First National Bank of Atlanta, 628 F.2d 871, 874 (5th Cir. 1980). It has been held that a summons is not issued in good faith if the single purpose of the I.R.S. is to gather evidence for a criminal prosecution. Id.

The appellant's first objection is that the nonattendance of the agent who issued the summonses prevented Gholson from discovering if there was such an improper purpose. We reject this argument for two reasons. First, although the issuing agent was unavailable at the time of the hearing, his superior and his replacement on the case were both present at the hearing. Second, even a finding of improper motive by the agent in issuing the summonses would not be dispositive of the merits of the case. United States v. Davis, 636 F.2d 1028, 1036 (5th Cir. 1981); United States v. Harris, 628 F.2d at 882. Prior to any recommendation of criminal prosecution, an issuing agent's individual motivation is insulated by layers of review within the I.R.S. itself. United States v. LaSalle National Bank, 437 U.S. 298, 315, 98 S.Ct. 2357, 2366, 57 L.Ed.2d 221, 235 (1978). We, thus, find no error in the appellant's first challenge.

The appellant also contends in his second and third objections that he was not allowed sufficient discovery and inquiry both at the pre-hearing and hearing levels. As already mentioned, in order to show that the summonses were issued solely for a criminal...

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3 cases
  • Barquero v. U.S.
    • United States
    • U.S. Court of Appeals — Fifth Circuit
    • 20 Abril 1994
    ...allowed in summons enforcement proceedings are committed in large part to the discretion of the district court." United States v. Johnson, 652 F.2d 475, 476 (5th Cir.1981). Here, the challenged actions do not constitute an abuse of its discretion by the district court. See id.; cf. Barrett,......
  • Stites v. I.R.S.
    • United States
    • U.S. Court of Appeals — Fifth Circuit
    • 26 Junio 1986
    ...rejected by the courts. 1 See, e.g., Donaldson v. United States, 400 U.S. 517, 91 S.Ct. 534, 27 L.Ed.2d 580 (1971); United States v. Johnson, 652 F.2d 475 (5th Cir.1981); United States v. First Nat'l Bank in Dallas, 635 F.2d 391 (5th Cir.), stay denied, 451 U.S. 966, 101 S.Ct. 2043, 68 L.Ed......
  • U.S. v. Centennial Builders, Inc.
    • United States
    • U.S. Court of Appeals — Eleventh Circuit
    • 28 Noviembre 1984
    ...requesting the summons was irrelevant) in issuing the summons was to gather evidence for a criminal prosecution. United States v. Johnson, 652 F.2d 475, 477 (5th Cir.1981). This placed an "extremely heavy burden" upon the taxpayer, because the issuance of a summons was not improper as long ......

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