United States v. Cleveland Trust Company
| Decision Date | 07 March 1973 |
| Docket Number | No. 72-1804.,72-1804. |
| Citation | 474 F.2d 1234 |
| Parties | UNITED STATES of America and Peter B. Parish, Agent, Internal Revenue Service, Petitioners-Appellants, v. The CLEVELAND TRUST COMPANY, Respondent-Appellee, and John Miceli, Intervenor-Appellee. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Carleton D. Powell, Tax Division, Department of Justice, Scott P. Crampton, Asst. Atty. Gen., Meyer Rothwacks, John P. Burke, Attys., Tax Division, Department of Justice, Washington, D. C., on brief, for petitioners-appellants; Frederick M. Coleman, U. S. Atty., of counsel.
Takashi Ito and Robert J. Rotatori, Cleveland, Ohio, D. C. Armour, Cleveland, Ohio, on brief, for respondent-appellee.
Gold, Rotatori, Messerman & Hanna, by Robert J. Rotatori, Cleveland, Ohio, for intervenor-appellee.
Before WEICK, EDWARDS and KENT, Circuit Judges.
This is an appeal by the United States from an order of the United States District Court for the Northern District of Ohio denying judicial enforcement of a summons issued under the provisions of § 7602 of the Internal Revenue Code of 1954. 26 U.S.C. §§ 7602, 7402(b), 7604(a) (1970). The judgment of the District Court was entered some months before the United States Supreme Court decided Couch v. United States, 409 U.S. 322, 93 S.Ct. 611, 34 L.Ed.2d 548 (1973). In that case the Supreme Court held that enforcement should be granted in relation to a government summons of financial reports and data turned over by taxpayer to her accountant for preparation of her income tax returns.
We believe the fact situation in Couch, on the basis of which the taxpayer therein argued that material in her accountant's hands was protected by her Fifth Amendment right of privacy, was somewhat stronger in support of that argument than is the fact situation in this case. In this case the data sought by the government consists of a financial report of the taxpayer submitted to the Cleveland Trust Company for the purpose of securing a commercial loan. We do not believe that one supplying such a report for such a purpose retains his constitutional right of privacy therein. It is our belief that the Couch case is authority for deciding this case in favor of the government, as far as the major legal argument presented to us on this appeal is concerned.
The District Judge, however, relied in his opinion upon Donaldson v. United States, where the Court said:
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 a recommendation for criminal prosecution. Donaldson v. United States, 400 U.S. 517, 536, 91 S.Ct. 534, 545, 27 L.Ed.2d 580 (1971).
The District Judge then held as a matter of fact that the taxpayer here was being investigated solely for criminal purposes and that the revenue summons had not been issued "in good faith."
On the total record of this case, we hold that these findings of the District Judge are clearly erroneous.
It is clear, of course, from the record in this case that the opening of a civil tax investigation into the tax returns of Miceli Dairy Products Co., Inc., in which John Miceli was a principal stockholder, was initiated by a representative of the Strike Force assigned in the Cleveland area to investigate organized crime on behalf of the Department of Justice of the United States. It appears to us that the District Judge's bad faith finding was directly related to his view that there was something odious about the Strike Force's recommendation of a...
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