*1 et al. v. MOBILE FIRST OF NAT. BANK UNITED STATES. 11757.
No. Appeals, Circuit. Fifth
Circuit Court 15, 1947.
Feb.
Rehearing March Denied
Ripps Ripps, Anne years and M. the for 1945, inclusive, 1940 to and then and there produce inspection for examination and by duly the agents authorized and em- Arendall, Chas. Hand B. C. and Charles ployees of the Bureau of Internal Revenue Ala., Mobile, appellants. Jr., both of books, any and all papers records of and nature, irrespective whatever whether Paul, Key, Muriel A. S. Sewall F. and of such records also pertain to trans- Prescott, Atty. Gen., Doug similar Sp. Assts. to the actions Gen., persons during other Al McGregor, Atty. W. and las Asst. firms 1945,inclusive, years the said 1940 to Ala., Tully, Atty., Mobile, bert of U. S. J. pertain to or reflect the of cash- issuance the United States. ier’s exchange, bills of certificates LEE, Before McCORD, WALLER, and of deposit, banks, drafts or checks on other Judges. agents in order that the of said of Bureau Internal may therefrom select WALLER, Judge. such items and transactions to the and for Int.Rev.Code, con- any firm or to and for of individuals the per- tains following provisions the that are hereinabove named they deem relevant tinent this case: 3614. Examination “§ and the liability of the books of and witnesses. above named (Em- firm and individuals.”1 phasis added.) “(a) liability To determine of tax- the payer. Commissioner, The pur- think order is for the We the broader than the pose requires of the statute it ascertaining correctness in that the any bank to of inspection return purpose making the of duce for by and examination the made, agent where none has “any books, been is au- revenue all thorized, by any nature, records employee irrespec- officer or of and of whatever Revenue, the of Bureau includ- tive whether pertain such records also service, designated the field ing by him to similar transactions with other purpose, books, for that any during years the said 1940to firms papers, records, inclusive,” bearing or memoranda whereas the statute authorizes upon required papers, the matters included the examination of in return, require bearing upon “matters attendance person included in the return” rendering the return or of testi- and to take employee mony of other person, with reference to such person having by attendance the “matter law be included * * * knowledge return, in premises, such ”. take testimony his with reference the matter We do not think statute that the required law be included re- in such enough require the Bank pro broad turn, power oaths to administer duce run on Re its persons.” (Emphasis cordak machine over six million in items added.) volving transactions for a of five Upon petition agent of an Com- years unless the records to exhibited Revenue, pur- missioner of Internal upon bear be in portedly pursuance foregoing parties cluded the return named in statute, provision be- Court petition being whose low directing investigated. made order Ter- party D. A third should not be John rell, Vice-President Cashier to produce records give called appear Bank, before revenue statute under the unless rec evidence day to, “then and there named to tes- ords and evidence are relevant tify liability in the matter of the tax being investigated, which, upon, matter case, Company, Gulf Tobacco Joseph Coast this was the income tax return Mitchell, Mitchell, Company, Joseph Rebecca F. Coast Samuel Gulf Tobacco J. opinion below, For a full statement of see of the Court the case the able and exhaustive F.Supp. 616, D.C., 67
534=
Mitchell,
Mitchell,
merely
the Bank
F.
Samuel
its
Rebecca
all
'J.
order
Ripps.
go through
Ripps, and
M.
him to
for the
Anne
them
purpose of
ascertaining
or not
whether
hereby
appealed from
order
*3
possesses any
may
Bank
records which
following lan
striking
the
by
amended
out
may not be relevant to the tax
under
returns
such rec
“irrespective of whether
guage:
investigation. He may first obtain informa-
similar transactions
ords
to
pertain
also
tion as
to what
are
or documents
during the
persons or firms
with
possession
within the Bank’s
to the
relevant
inclusive,
1945,
which
years 1940 to
said
inquiry
oath,
by
ap-
interrogating,
under
cash
the issuance of
pertain to
reflect
propriate
Upon
of
the
a
.Bank.
exchange,
checks,
certificates
ier’s
bills of'
satisfactory showing by
agent that cer-
the
banks,
on other
deposit, drafts
checks
of
pertinent
tain
records
have a
or documents
of
agents
Bureau
of the
order that said
in
upon
bearing
matters
in-
to be
may select
therefrom
Internal Revenue
.
investigation,
cluded in
the
the
under
to and
the
transactions
for
items and
produce
Bank would
to
be
them for
any of the individuals
firm to
and
the
agent, whereupon the
of the
they
relevant
deem
hereinabove named
agent would
for himself whether
determine
the
liability
tax
of
to the
pertinent
not they
relevant to his needs and
were
and individuals.”
firm
above named
copies
take
thereof if he so desired.
following:
the
inserting
lieu
in
thereof
the
supply
Bank
Should
decline
docu-
the issuance of
pertain to
reflect
“which
upon
by
agent,
ments
demand
the
the Court
exchange, certifi
cashier’s
of
bills
compel compliance upon
would
showing
the
on other
checks
deposit,
of
cates
drafts'or
upon
the documents
that
demanded bear
1945, in
1940
banks, during
years
the
matters
to be
in
included
the return
clusive,
upon, or
reference
have
bear
party
of
investigation.
the
under
But i-t
to,
liability of
above-
federal tax
the
the
wholly
require
unreasonable
large
is
a
individuals,
allow
and to
firm and
named
records, checks, drafts,
its
bank to
Rev
of Internal
the Bureau
agents
the
of
years
of
for a
six
an exam-
from
to select
of the United States
enue
agent merely
the
by
order for
ination
him
transactions
such items and
such documents
to find
not
whether
Bank’s
out
the
firm or
of
for the
upon
questioned
the
records
returns
deem re
they
named as
individuals above
parties.
gives
certain named
of
The statute
of
liability
pertinent
levant
the
only
right
papers,
him
the
to examine
individuals.”
firm and
the above-named
records,
upon
or memoranda that “bear
the
below, as herein
of
The order
the Court
required to be
included within the
amended,
modified
permit
not
fishing
does
of
ex-
return”
Affirmed.
pedition into the affairs of all
custom-
the
will, however,
bank.
ers of the
courts
The
Rehearing.
Petition
On
production
readily require
of
relevant
agent
Before an
Bureau
evidence, and will afford the Government
entitled,
Internal Revenue
under
3614
§
privilege
determining which of
Code,
of the Internal Revenue
use, provided
it desires
the’rec-
Int.Rev.Code, 3614,
require
have a court
§
sought are shown
be relevant and
ords
produce records,
agent
party
third
inquiry
to the
hand.
precision
specify
sufficient
must
the revenue
Neither
nor the Court
identification the documents desired
their
authority
require
under the statute to
has
inspected.
to be
His demands must be with
memoranda, books, etc.,
production
scope
statute. He must also
they
parties
bearing,
unless
third
have a
upon
allege that such documents “bear
investiga-
the return or returns under
required the re
included
tion.
question. His
demands will
be
turn”
not
Martin, Internal
Agent,
Revenue
they
general,
if
are too
In
v.
complied
too
Co.,
C.,D.
33 F.Supp..
specification, as to
that
Securities
wanting in
indicate
Chandis
Court,
3614,
expedi
discussing
merely exploratory fishing
they are
§
I.R.C.,
said:
entitled in this case
have
is not
tions. He
as to
agents
judges
not
sole
liability
determine
the correct
scope
of the examination.
who made
return or
failed
one,
make
and does
authorize the
satisfy
“They must
Court that what
curement of
that
material
evidence
be
they
actually
Other-
seek
needed.
in verification
tax return
some
wise, they
inquisitorial
assuming
would
other person.
618, 26
Revenue Act
§
powers beyond
scope
the statute.”
U.S.C.A.Int.Rev.Code,
U.S.C.A.
§
[26
was
foregoing
case
affirmed
3614 (a)].”
Martin,
9th Circuit
*4
Agent,
Co.,
3631, I.R.C.,
(§
v.
Securities
The statute
128 F.2d
26
Chandis
U.S.C.A.
Int.Rev.Code, 3631)
731. The
and ninth
sixth
headnotes
the exami-
even limits
§
follows, respectively:
taxpayer’s
nation of the
decision
as
only
are
books to
necessary.
examinations as are
rights
of an internal revenue
“The
require production
We do not
that
mean
the revenue
statutory,
examination are
order
agent must be able
to describe
minu+e
statute,
granted by
to obtain the
he
relief
every
paper
detail
document and
that he
there-
bring
must
within the terms
himself
inspect,
wishes to
but
be
he must
able
U.S.C.A.Int.Rev.Code,
3614 (a),
26
of.
§§
describe them with
par
reasonable
1
3631,
(a),
3615
3633.”
ticularity
that
officers
Bank
will
have sufficient
information
enable them
that no tax-
providing
“Under statute
such records
payer
subjected
unnecessary
shall
be
agent.
of the revenue
investigation,
examination
Bureau of
or
power make an
Internal Revenue has no
This Court does
intend to hold
not
investigation
or
unnecessary
examination
that
Bank
pro
not
could
be
person.
of a
books
third
records, that
duce
have
reasonably
been
des
Int.Rev.Code,
3631.”
§
ignated
identified,
transactions
Lambert, Special
McDonough
In
v.
persons
between other
or firms and the tax
838,-
Agent,
F.2d
the First
con-
94
payers whose
investiga
returns
under
are
3614. Since the first
sidered
headnote
the Bank
tion. But
be
cannot
accurately and concisely states the Court’s produce
investigation
B’s accounts in an
conclusion,
quote
we
it:
alleged
be
unless it
that
of A’s
returns
authorizing
statute
the Commis-
“The
account,
upon the
B’s
purpose
sioner
return
correctness
A’s
ascertaining
the correctness of
re-
have been included
A’s re
that should
turn,
employee designated
by any officer
turn.
him,
papers, records,
amplify
undertaken to
having
After
thus
memoranda,
require the
attendance
opinion,
expressed
former
views
in our
rendering the
person
return
petition
we think that
rehearing
employee,
is
to the
confined
be,
should
and the
hereby,
same is
bearing upon
curement of evidence
in given
to be included
Denied.
tecum)
(the subpoena
specifies
particularity”,
1
duces
“reasonable
term
specificity
time,
reasonable
and with rea-
with
denote
used to
as
ought
particularity
subjects
sonable
demanded
documents
described,
to harmonize
which the documents
relate.”
called
seems
43,
Henkel,
expressions
—Hale v.
370, 380,
201
26
same sense
U.S.
S.Ct.
used
subpoena
following
I concurred in the rehearing. opinion on
now concur in the
However, express further view: this I agent may go
While it true that expedition
on ac- a fishing and examine n and transactions the bank counts investigation,
than those to the commingled
I accounts are think that where ,appear transactions of other with those page
on the mixed same investiga- under
tion, such records should not be view of agent simply because other
denied
unrelated accounts and transactions Certainly, appear.
inescapably separate, not look at and examine
unrelated accounts and transactions investigation not involved
hand, but accounts and if accounts trans-
transactions and the of other in fact com-
actions mixed,
mingled he should able to he, records for
bank, charged duty respon- with the investigation. making
sibility Philadelphia, Charles S. Jacobs, Pa..
(Wm. Spofford, McDowell,, R. Sherwin T. Ballard, Spahr, Ingersoll., & Andrews Philadelphia, Pa., all brief), on the petitioner. Zarky, Washington, P.
Hilbert D. C. (Douglas McGregor, Gen.,. W. Atty. Asst. OF IN v. COMMISSIONER HALLOWELL Key Monarch, Sewall Spec.. Louis and J. REVENUE. TERNAL Atty. brief), Assts. to Gen. on the for re- 9167. No. spondent. Appeals, Circuit. BIGGS, Third Before ALBERT LEE STE Circuit Court Argued 1946. Oct. KALODNER, PHENS and Judges.. March Decided
BIGGS, Judge. taxpayer’s; September 1937 the On trust irrevocable established husband conveyed Trust”) to which he cer- (“No. tain-stocks, naming his son as The- trustee. provided', indenture paragraph second said, hold that, said Trustee shall dividends, stock stock shares during the natural life- intact thereon paid Hallowell, wife, and col- N. my Blanche thirty- thereof. Within income the net lect year expiration of fiscal days after notify beneficiary the Trustee in. shall collected, the income she desires writing if