895 F.3d 1284
11th Cir.2018Background
- In 2016 the IRS served summonses on Bank of America for records of accounts over which Michael Presley, Cynthia Presley, Presley Law, and BMP had signature authority, including escrow/trust accounts containing client funds. Plaintiffs (an attorney, his firm, and related parties) were notified and moved to quash production of escrow/trust records that revealed client financial information.
- The district court denied the motion to quash, finding the summonses complied with the Powell factors and that Plaintiffs lacked standing to assert their clients’ privacy interests in the bank records. Plaintiffs appealed.
- Plaintiffs argued the Fourth Amendment required probable cause because the records revealed clients’ confidential information, and alternatively that the IRS should have used §7609(f) John-Doe procedures or obtained ex parte court approval before obtaining unnamed clients’ records.
- The government defended enforcement under the Powell administrative-summons framework and relied on the third-party doctrine and Miller to argue clients lacked a reasonable expectation of privacy in bank records; it also maintained §7609(f) did not apply because the summonses identified the investigated persons.
- The Eleventh Circuit affirmed: it held Miller and related precedent foreclose a Fourth Amendment objection, the RFPA does not bar IRS summonses issued under Title 26, and §7609(f)/John‑Doe procedures were not required here.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Fourth Amendment required probable cause or otherwise barred enforcement of IRS summons for bank/escrow records | Presley: clients have a reasonable expectation of privacy in escrow/trust/bank records so government must show probable cause | Government: third-party doctrine (Miller) means no reasonable expectation of privacy; Powell suffices for reasonableness | Held: No reasonable expectation of privacy under Miller; Powell compliance satisfies Fourth Amendment reasonableness; probable cause not required |
| Whether Plaintiffs (attorney/firm) may assert clients’ Fourth Amendment privacy rights | Presley: as attorney/firm they may assert clients’ rights because clients face hurdles in asserting them | Government: standing ordinarily belongs to the person whose privacy is invaded; not at issue because Fourth Amendment standing treated as merits | Held: Court avoided resolving standing as a separate jurisdictional barrier and treated it within the merits—result would be same because Miller controls |
| Whether the Right to Financial Privacy Act (RFPA) or Neece requires different treatment | Presley: RFPA (and Neece) limits bank disclosure and might require additional protections | Government: RFPA expressly exempts disclosures made in accordance with Title 26 and IRS followed §7609(a) notice here | Held: RFPA does not block enforcement of IRS summonses issued under Title 26; Neece is distinguishable (voluntary bank disclosure in Neece) and inapplicable here |
| Whether §7609(f) John‑Doe/ex parte hearing was required because the summonses swept in unnamed third-party clients | Presley: Tiffany suggests ex parte §7609(f) process is required when summons implicates unnamed taxpayers | Government: §7609(f) applies only to John‑Doe summonses that do not identify the person whose liability is at issue; here Plaintiffs were identified and received notice | Held: §7609(f) not required; Tiffany supports enforcement where the IRS properly notifies the party under investigation (Plaintiffs) and Powell factors are met |
Key Cases Cited
- United States v. Miller, 425 U.S. 435 (bank-records third-party doctrine bars reasonable-expectation-of-privacy claim)
- United States v. Powell, 379 U.S. 48 (framework for judicial enforcement of administrative summonses)
- Tiffany Fine Arts, Inc. v. United States, 469 U.S. 310 (notice to investigated party can justify incidental intrusion on unnamed taxpayers; §7609(f) not required when proper notice and investigation exist)
- Carpenter v. United States, 138 S. Ct. 2206 (distinguishing third-party doctrine limits; Supreme Court reaffirmed Miller’s continued vitality)
- Neece v. IRS, 922 F.2d 573 (10th Cir. decision addressing RFPA interaction where bank voluntarily disclosed records — distinguished on facts)