United States v. FIRST NATIONAL BANK OF OAKLAND, Civ. A. No. K-75-842

• Decision Date: 31 July 1975
• Docket Number: K-75-843.,Civ. A. No. K-75-842
• Parties: UNITED STATES of America and Thomas P. Lyden, Revenue Agent of the Internal Revenue Service v. FIRST NATIONAL BANK OF OAKLAND, and Richard D. Stanton, Vice-President of First National Bank of Oakland, Carlton E. Bowser, Sr., and Violet M. Bowser, Intervenors. UNITED STATES of America and Thomas P. Lyden, Revenue Agent of the Internal Revenue Service v. GARRETT NATIONAL BANK and Milford E. Beckman, Vice-President of Garrett National Bank, Carlton E. Bowser, Sr., and Violet M. Bowser, Intervenors.
• Court: U.S. District Court — District of Maryland

399 F. Supp. 379

UNITED STATES of America and Thomas P. Lyden, Revenue Agent of the Internal Revenue Service v. FIRST NATIONAL BANK OF OAKLAND, and Richard D. Stanton, Vice-President of First National Bank of Oakland, Carlton E. Bowser, Sr., and Violet M. Bowser, Intervenors.

UNITED STATES of America and Thomas P. Lyden, Revenue Agent of the Internal Revenue Service v. GARRETT NATIONAL BANK and Milford E. Beckman, Vice-President of Garrett National Bank, Carlton E. Bowser, Sr., and Violet M. Bowser, Intervenors.

Civ. A. Nos. K-75-842, K-75-843.

United States District Court, D. Maryland.

July 31, 1975.

Jervis S. Finney, U. S. Atty., and William McC. Schildt, Asst. U. S. Atty., Baltimore, Md., for plaintiff.

Franklin G. Allen and Piper & Marbury, Baltimore, Md., for defendants.

Carlton E. Bowser, Sr., pro se for intervenors.

FRANK A. KAUFMAN, District Judge.

In these two cases the Internal Revenue Service seeks, pursuant to 26 U.S.C. § 7402(b) and § 7604(a), Orders of this Court requiring enforcement of summonses of the Internal Revenue Service (IRS) to the defendant banks to give testimony and to produce for examination all bank records, data and the like in their possession relating to an investigation of the income tax returns of Carlton Edward Bowser, Sr. and Violet M. Bowser (the Bowsers) for the years 1971-1973, inclusive. This Court issued a Show Cause Order to defendant banks, and sent copies of that Order, and of the Government's petitions to enforce the summonses, to the Bowsers. A hearing in these two cases was subsequently held in this Court at which time counsel for the Government and for the banks were heard. The Bowsers were represented by Mr. Bowser who appeared pro se for himself and his wife. Over the objection of the Government the Bowsers were permitted to enter these cases as Intervenors. At the conclusion of the hearing this Court announced that it would enter the Orders sought by the Government.

I

In Snyder, Bowser, et al. v. United States, 502 F.2d 1163 (4th Cir. 1974), in which at least one of the defendant banks was a defendant and in which the taxpayer-intervenors herein were among plaintiffs, and in which some of the documents sought herein may also have been involved,¹ the Fourth Circuit affirmed the dismissal of a suit seeking, inter alia, to restrain several officials of the Internal Revenue Service from requiring production of certain records and information of the Bowsers which were allegedly then in the possession of one or both of the two banks. In so doing the Fourth Circuit, in a per curiam opinion filed July 29, 1974, wrote that the Bowsers "could assert any reason why the summonses should not be obeyed to the hearing officer before whom the summonses were returnable; and if their claim was not sustained, they could request noncompliance by the banks and litigate their rights before any court to which application for an order to require compliance was made."

On February 28, 1975, this Court filed an opinion in Bowser, et al. v. First National Bank of Oakland, Md., et al., 390 F.Supp. 834 (D.Md.1975), in which the Bowsers sought an injunction restraining the two banks from honoring IRS summonses to produce the Bowsers' records. The Government in that latter case, eschewing the opportunity to intervene or be heard formally, simply provided citations and argument to this Court in support of the proposition that the banks must produce what the Government sought regardless of the opposition of the Bowsers and also regardless of whether or not the Bowsers had been afforded an opportunity in any administrative or court proceeding to be heard in support of that opposition. Noting the above-quoted language in the Fourth Circuit's July 29, 1974 opinion, the seeming support therefor set forth in Reisman v. Caplin, 375 U.S. 440, 449-50, 84 S.Ct. 508, 11 L.Ed.2d 459 (1964), and the split of authority evidenced by opinions filed in certain subsequent cases, this Court concluded (at p. 836):

* * * To date, the Internal Revenue Service has not afforded the plaintiffs an opportunity to appear before a hearing officer to assert why the summonses to the banks should not be obeyed, and, furthermore, the defendant banks herein have, as of this date and pending this Court's determination herein, refused voluntary compliance with the summonses in issue until they are ordered so to comply by this court.8 In the light of the language so used by the United States Court of Appeals for the Fourth Circuit, this Court cannot but reach the conclusion that the plaintiffs are entitled to have the opportunity in one or more appropriate administrative and/or court proceedings to present their opposition to the obtention by the Internal Revenue Service of the documents and records which the Service seeks from the two banks.

8 In essence, the defendant banks took the position in oral argument in this case that the banks should not be

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