United States v. Iva L. McKee

summary motions defendants’ granting

judgment. finding in erred court

The district the sei- permitted exception view plain Jewelry pawn without jewelry.

zure of can jewelry in a store

tickets “discovered” immediately incrimi- to be

hardly be said discovery nor does such

nating evidence to associate the probable cause

give rise Further- activity. criminal

jewelry with defen-

more, officer no reasonable believed that position could have

dants’ activity. was evidence of

jewelry Todd, Brown,

Thus, and John were officers immunity. We qualified entitled to judgment of the REVERSE the

therefore No. 98-1771. court Case

district

CONCLUSION we AFFIRM foregoing, light No. judgment court’s Case

the district

98-1760, court’s the district REVERSE and 98- Nos. 98-1756

judgments Case two cases REMAND the latter consistent proceedings

for further opinion.

this America,

UNITED STATES

Plaintiff-Appellee, McKEE, Defendant-Appellant. L.

Iva

No. 98-5413. Appeals,

United States Court

Sixth Circuit.

Argued: April 27, 1999. Sept. and Filed:

Decided (“IRS”) investi-

Internal Revenue Service’s rights, violated her constitutional gation with its comply the IRS failed to during the course of its regulations own affirm investigation against her. We conviction, but not without reser- McKee’s vations.

I.

A. case illustrates that the substantive This an IRS civil audit and distinction between always tax is not a criminal put district court clear. As the Watergate manner reminiscent Hearings, the issues this case are essen- “(1) did the IRS know about tially: What corporate and tax the McKees’ individual (2) affairs?; when did the IRS know and (Dist.Ct.Op.). at 420 n. 3 it?” See J.A. involving similar is opinion In a recent judice, the Seventh as the case sub sues background provided preliminary Circuit investigations. tax the structure of IRS See United States Jr., Ward, At- Assistant U.S. Hugh B. — (7th Cir.1998), denied, 447 cert. U.S. Knoxville, briefed), and torney (argued -, L.Ed.2d S.Ct. Tennessee, Plaintiff-Appellee. for (1999). in find the Circuit’s We Seventh (argued and Moncier Herbert S. pur explication helpful to the troductory Knoxville, Tennessee, briefed), for Defen- case, it here: repeat this and will poses of dant-Appellant. responsibility for splits The IRS NELSON, JONES, Before: nation’s tax laws between enforcing NORRIS, Judges. Circuit investigative two divisions. its (“CID”) Investigative Division Criminal JONES, J., delivered R. NATHANIEL charged investigating court, ALAN in which opinion and related violations of the code NORRIS, J., A. joined. DAVID E. are investigators federal statutes. 545), NELSON, separate (p. J. delivered many Like oth- “special agents.” called ALAN E. in which concurring opinion, they agents, law enforcement er criminal NORRIS, J., joined. addition, badges. carry firearms and an adminis- must recite special agents

OPINION soliciting infor- warning prior trative JONES, R. Circuit Beckwith v. taxpayers. NATHANIEL mation from 341, 343, States, Judge. United U.S. (1976) (quoting 48 L.Ed.2d S.Ct. ap- L. McKee Defendant-Appellant Iva agents). warning provided special for tax fraud on peals her conviction hand, the Examination the other against her On the evidence grounds responsible the IRS is Division of because suppressed should have been civil tax Examina that month conducting anonymous audits. another source investigators are known as (although tion Division she knew the person’s identity) special In contrast to agents.” “revenue personal expenses the McKees’ were agents carry do not fire agents, revenue being paid through Valley Electric in the arms; they required provide are vacations, bills, food, nor form of electric an taxpayers with administrative warn household necessities. Although an Examination Division ing. Based on the information from both concludes with some sort typically audit source, Pique anonymous and the settlement between the IRS and civil instituted a civil audit of the McKees may taxpayer, audit uncover early September September 1992. On that causes the revenue evidence 1992, Loges initiated contact with the the case to the CID for criminal to refer McKees them sending request- a letter regulations, Under a investigation. IRS ing appointment an for an audit. The revenue who uncovers a “firm in 2, September 1992 letter was a form letter fraud on the part dication of setting forth the of purposes the audit. immediately must taxpayer” suspend The letter informed the McKees of their her audit and refer the case to the CID. right to have present attorney, an a certi- Revenue See Internal Manual accountant, public fied any repre- or other 4565.21(1). At that point, the CID choosing. sentative of their The letter the case and the enters IRS’ efforts also states that examination “[a]n of such possibility focused on the become of taxpayer’s return suggest suspi- does not [prosecution]. generally dishonesty cion of liability.” or criminal Saltzman, Michael I. IRS Practice and J.A. at 40. ¶¶

Procedure 12.01 & 12.03[1][a]. 447. 153 F.3d at Loges also copies attached of two other routinely documents which are sent to the B. taxpayer when the IRS initiates a civil underlying appeal The facts this are (1) 1, an audit: IRS Publication which is a generally dispute. not McKee1 and her form Rights entitled “Your as a Taxpay- husband McKee were managers William er”; 609, an and IRS Notice the “Pri- and shareholders of an electrical services vacy Act purpose Notice.” The of IRS Electric, Inc., company Valley called Publication is to inform the taxpayer of Knoxville, Tennessee. For seven months her and proce- some of the basic Pique a woman named June policies dures and associated with a civil Valley worked at Electric a bookkeeper. as audit, postponement and allows for anof August if Pique contacted IRS audit wishes to consult an civil) (ie., Agent Loges attorney. Dee re- at Privacy J.A. 47. The Act garding possible part tax violations on the Notice informs the taxpayer of the IRS’ alleged information, the McKees. Most of the im- legal right to ask for the rea- (“to proprieties corporate involved the use of son the agency asking carry for it laws”) personal expenses, funds for such trips, as out the U.S. and the conse- goods, utility household and home quences failing cooperate bills. with the According Pique, and, did (“you may charged McKees not audit be penalties cases, “additional” personal disclose this income in certain you may subject be Apparently, on their income tax returns. criminal prosecution”). J.A. at Fi- 42-^13. Pique previously Loges nally, had alerted about the letter also included an attached violations in another unrelated tax investi- standard Information Document Request gation, audit, Loges Pique corporate and believed to be a for a requesting numerous Loges credible source. later corporate informed and accountant records. The dant-Appellant 1. All references to “McKee” are to Defen- Iva McKee. that the notes looked “iden- suspicion, contained no forms and attached

letter tical,” Loges and theorized one of the prompt- audit had been indication times, Log- infor- had backdated. At anonymous eventually be- meeting at this Mr. McKee 17, February the 1993 meet- Following prose- criminal the basis for the later came the Loges terminated all contact with ing, day, The next the McKees. against cution and determined that a criminal McKees Valley that Mr. McKee Loges informed appropriate. After sev- might referral be 1991 tax audited for the Electric would be by the IRS’s Civil eral levels of review year. Division, the the case was referred to on again Mr. McKee met Loges and 5, in- officially 1993. The CID May on 24, the conjunction September under they the McKees that were formed Loges audit. Valley corporate Electric 9, investigation on November criminal company Mr. McKee about the questioned 1993. book, book, and share- stock record minute to the U.S. The case was transferred Again, Mr. documents. holder loan Tax Division for Department of Justice sim- company responded McKee on criminal prosecution evaluation for Loges and keep things. ply didn’t 4, 1997, 11, March 1996. On March day, again following met the Mr. McKee jury in the Eastern District grand federal checks and ex- Loges found several indict- returned a two-count of Tennessee been, but were that should have penses tax fraud the McKees with charging ment ac- not, corporate listed in Mr. McKee’s 7206(1) and 18 U.S.C. under 26 U.S.C. employee loan account. count or assigned magistrate to a § The case was 2. months, contin- ensuing the Over judge. doc- request additional records ánd ued to pretrial The McKees filed several and discover- Valley from Electric uments motions, suppress a motion to including in the direction discrepancies pointing ed which are violations, Kastigar hearing,2 at least and for a including possible hearing on After a appeal. bases of this corporation to the payable two notes motion, 15, magistrate judge issued 5, 1990, the March and March were dated 26, 1997, rec September on 1991, lengthy In notes for the respectively. her be concern, suppress the motion to file, ommending if Loges expressed McKees’ 441, States, Fifth Amendment violation of the defendant’s Kastigar 406 U.S. v. United 1653, (1972). See, Overmyer, pur e.g., rights. L.Ed.2d 212 The United States S.Ct. 1990). 457, (6th Kastigar hearing to determine if pose of a 460-62 Cir. 899 F.2d government's was obtained in evidence objec- filed Although McKees IRS’s Internal Revenue denied. Manual (hereinafter “Manual”). Although magistrate’s report, the dis- neither to the tions government the recommendations McKee nor the raises the adopted trict court point, we initially must address whether a judge opinion is- magistrate 9,1998. taxpayer may properly a challenge base to February on sued alleged tax conviction on the IRS’s non- 1998, filed February McKees On compliance procedures with the of its Man- for IRS’s failure to a motion to dismiss ual. conduct the accord- regulations. February own On ing glance, to its At precedent sug first our (supplemented an additional gests not. Mfg. See Valen Co. v. United (6th Cir.1996). following day), States, the district court order case, motion as well. This issue is denied this In that argued that the appeal. on against also before us assessments levied him for delin quent filings were invalid because the subsequently agreed plead Manual suggested his conduct was right reserved the guilty, appeal but rejected excused. argument We this charges against this court. William meritless, “provisions and noted that the dismissed. On March McKee were manual ... only govern [IRS’s] 1998, the district court sentenced McKee internal affairs of the Internal Revenue probation. to twelve months’ They Service. do not have the force and timely This followed. appeal effect of law.” (quotations Id. and cita omitted). tions This rule is based on the II. view that the Manual generally creat agency’s ed for the own internal adminis reviewing the district court’s tration, protection and not of tax ruling on a defendant’s motion to suppress, See, payers. e.g., Mapp, United States v. uphold we will the district factual court’s (7th 685, Cir.1977); 561 F.2d 690 United erroneous; findings they clearly unless are 417, Lockyer, States v. 448 F.2d 420-21 however, we review the district court’s (10th Cir.1971). Additionally, ap this rule conclusions of law de novo. United States plies to both civil and criminal (6th cases. See 227, Cir.1995). Dotson, v. 49 F.3d 229 Marra, 1196, United v. States 481 F.2d when, finding clearly A of fact is erroneous (6th Cir.1973) 1204 (expressing doubt that although there is some evidence to support internal handbook guidelines IRS affords review, finding, upon we are “left with rights substantive to taxpayers); United firm the definite and conviction that a mis Tenzer, (2d 222, States v. 127 F.3d 228 take has been committed.” United States Cir.1997) (internal policy IRS was not “di (6th Cir.1998) Russell, 687, v. 156 F.3d 690 public publicized”), rected to nor cert. de omitted). (quotation and citation —nied, —, 1580, U.S. 118 S.Ct. 140 (1998); L.Ed.2d 795 United States v. Mi- III. (1st chaud, 495, Cir.1988) 860 F.2d 499 A. J.) (“the (Breyer, law is clear that an IRS agent’s violation of a regulation ... does argues McKee her conviction is in- prevent prosecution and conviction aof (1) Loges valid for two reasons: should defendant, nor it require suppression does have turned the over to evidence”); States, v. Groder United did; earlier than actually she (4th 139, 142 Cir.1987) (Manual F.2d provi complete did not the “Form 2797” rights sion “confers no substantive priv or in the course investigation. of her ileges upon taxpayers”). Both of these theories share the same However, underpinning-that Loges comply failed to we believe that the Manual’s are, least, with provisions provisions very the relevant contained in at the relevant approaches,3 proceed and we will a con these taxpayer’s whether determining offended. accordingly. have been rights stitutional 741, Caceres, v. 440 U.S. States

United (1979), 1465, the Su 59 L.Ed.2d 733 S.Ct. B. obtained ruled that evidence preme Court regulations explicitly prohibit provisions of the Manual’s IRS in violation fall developing did not a revenue from a crimi against recording interviews exclusionary rule because those against within the nal case under did not violations of Manual particular investigation. of a civil See United guise Id. at rights. on constitutional infringe Powell, F.2d 1100 n. 12 States v. Caceres, however, 755-56, (5th Cir.1988) 99 S.Ct. 1465. (citing Internal every rule that only rejected per se 9311.83(1)4). Manual, ar McKee first Manual was tantamount to of the violation or gues Agent Loges knew at least did violation. The Court process a due strongly suspected from the outset possibility that a federal open leave McKee had committed criminal tax viola provisions the Manual’s may court enforce tions, through guise went of a “compliance [provision] when with civil audit to collect evidence for federal by the Constitution or mandated prosecution against her and her husband. Caceres, 440 U.S. at 99 S.Ct. law.” Although voluntarily complied 1465. Loges’s all document and record re “consensual is unreason quests, a search circuits adhere to Several able under the Fourth Amendment or vio may be overturned that a conviction view Fifth process lative of due under have violated a if the IRS is found to if Amendment the consent was induced “designed pro provision its Manual fraud, deceit, trickery misrepresenta taxpayers.” tect the agent.” the revenue tion Horne, v. 714 F.2d United States 451; Powell, at at accord F.3d (1st Cir.1983) curiam); accord United (per (1st F.2d 10-11 Leahey, States Cir.1970) process claim (allowing due argument her constitu- McKee’s —that give taxpay Special Agent

where failed heavily rights were violated —relies tional warnings provided Manual er certain Manual, which provisions on certain subject of a criminal inves that he was her agent suspend direct the revenue to Although quoted portion the of tigation). turn the matter over investigation civil and in the we do opinion, Home was dicta “firm developed has a to the CID once she then-Judge Breyer that was mem note warranting fraud” a criminal indication of and we afford panel, ber of the Home The “firm indication of investigation. Moreover, the deference to his views. provisions in various fraud” rule is located opined have Eighth Seventh and Circuits 4565.21(1), Manual, § including a conviction taxpayer may challenge that a which states: so by relying provisions, on the Manual’s examination, If, an examiner during an long taxpayer’s challenge as the was based [i.e., poten- uncovers a agent] revenue alleged on an violation of a constitutional by 9; situation caused Peters, tially fraudulent 153 F.3d at 451-52 n. right. See 531, Grunewald, taxpayer preparer, and or the the exam- F.2d States v. 987 United (8th Cir.1993). the case at the earliest approve iner shall discuss 534 & n. 3 We response developed IRS this rule as and Ninth Circuits 4. The 3. We note that the Fourth States v. by affording the Fifth Circuit's decision United approach deviate the above from 297, (5th 1977), Tweel, little, 300 Cir. 550 F.2d any, consideration to the if substantive practice of the IRS’s Crystal v. which characterized provisions in the Manual. See Unit- States, 1141, (9th Cir.1999); conducting bequest of CID civil audits at the ed 172 F.3d Groder, "shocking.” investigators as at 142. F.2d with group conferring rights convenience rule “no substantive possible his/her there is a firm indi- manager.... privileges upon taxpayers”). Once fraud all examination cation of criminal

activity suspended. be shall Although we have not had occa years impli sion recent to address the 4565.21(1) § Manual Inteenal taxpayer’s cation of a Fourth and Fifth 1996). Manual (August further rights during a au Amendment civil IRS that typical “Badges of Fraud” outlines dit, past. we have done so This identify during can agent the revenue “generally court has noted that an affir investigation. course of her Such misrepresentation by agent mative an IRS “Badges of Fraud” include: understate- investigation is routine when income; im- claiming fictitious or ment of fact it a criminal investigation requires is deductions; proper accounting irregulari- suppression evidence.” United States income; ties; allocation of improper (6th Cir.1979). Nuth, 605 F.2d by taxpay- acts or conduct suspicious The Nuth court also stated that the evi (April id 4231 HB 940 er. See 1981). suppressed only upon dence will be showing taxpayer “clear We are satisfied that the Manual’s Id; tricked or deceived.” see also United rule, requiring suspension of a civil investi (6th Allen, States v. gation agent has a “firm once revenue Cir.1975) (“In the absence of a clear show fraud,” type indication of is the rule that ing has been tricked or designed protect taxpayer’s is con by government agents deceived into rights. Eighth stitutional As the Circuit information, providing incriminating cogently explained: “Significantly different documents and statements obtained rights, responsibilities, expectations agents the Internal Revenue are admissi to civil audits and criminal tax inves apply ble.”); Marra, 481 F.2d at 1203. From tigations. flagrant disregard It would be a precedents, these upon incumbent deliberately of individuals’ de show, McKee to by clear and convincing ceive, lull, incrimi taxpayers or even into (1) evidence, that Loges made affirmative nating during themselves audit when misrepresentations in the in course of her obviously of an activities nature vestigation, and because of those mis Grunewald, investigation.” are under representations, McKee disclosed incrimi 534; F.2d at see also 153 F.3d at nating evidence to prejudice of her (“if agent a revenue continues to con rights. satisfy McKee can developing duct a civil audit after ‘firm burden, matter, her as a practical fraud,’ may justifi a court indications of showing Loges knowingly failed to ably conclude that the was in fact comply suspension-of- the Manual’s conducting a criminal under investigation rules.5 audit”). United States v. auspices of a civil For these Cf. (8th Wadena, reasons, Cir.1998), 152 F.3d 851 agree compliance we that — denied, U.S. —, § cert. by 4565.21is mandated the 119 S.Ct. Constitution. Groder, (1999); Tweel, (classify But see 816 F.2d at 142 143 L.Ed.2d 517 accord ing § essentially procedural 4565.21 as a F.2d at 299. form, Any The test to a determine constitutional viola J.A. at 426 n. 9. differences are of today tion we closely agent announce is to related not substance. If the revenue continues three-point employed by Eighth developed test the civil audit even after she has Wadena, 851; fraud,” is, Circuit. See 152 F.3d at Gru of "firm indications then she newald, fact, making misrepresentations 987 F.2d at 534. The district court affirmative to suggested Eighth taxpayer Circuit’s test is dif the constitutional detriment of the reviewing gathering ferent from whether the IRS com because she is criminal evidence plied provisions against taxpayer guise with its own Manual to honor under the of a civil taxpayers. proceeding. firm that understatement intention- Loges not had a or

Whether suspend failed to A in- fraud and al. failure to the correct indication mistake, of fact to be question may audit is a come be due to inadver- the civil Wadena, 152 tence, advice, clear error. professional reliance on reviewed record, of the Upon review negligence, F.3d at 851. honest difference of opinion, carelessness, the relief she afford McKee we cannot none of which consti- seeks. tutes the intent to defraud. deliberate (2) Loges that should have argues

McKee tax a Intent to evade occurs when immediately, the CID the case to taxpayer misrepresenta- referred knows that the the civil never have undertaken and should process; tion is false. Intent is a mental that at all. McKee contends necessary judge a state of mind. It is “firm indication of Loges requisite had the taxpayer’s intent actions. The when part of the McKees fraud” on the person says that a or does are things from two detailed information she received consequences to be-the natural assumed (one employees Electric Valley different person’s intention. informant) knew to be a credible whom she Manual, § HB INTERNALRevenue Thus, tax violations. alleging the same 23,1981). (April reasons, Loges’s entire civil inves- McKee Only the overzealous revenue most sham, purpose her true tigation was a agent referring have considered would in hopes of eventu- gather was to evidence to the CID as a result of the McKees’ case ally seeking prosecution. provided by Pique information and the uncon position McKee’s leaves us have other source. As several courts no that the IRS vinced. We have doubt properly recognized, major function of violations, such “tips” alleging receives tax a chance civil audit is to allow the daily on a basis provided Loges those in his tax re explain discrepancies jilted spouses, disgruntled employees, from 455; at ports. See 153 F.3d Unit citizens. That re or civic-minded Caldwell, 1395, 1402- ed States v. 820 F.2d tax alleging information the same ceived (5th 143; Cir.1987); Groder, F.2d at from part on the of the McKees violations Kaatz, United States hardly damning separate two sources is (10th Cir.1983) (revenue agent need allegations were not substanti because unan not refer case to CID face of evidence, any by documentary nor ated conceivable questions). swered While is a conclusion supporting other evidence may presented that a revenue be her tax intended to evade tax overwhelming with such evidence of See, obligations. e.g., InteRnal reasonable conclusion fraud 4565.21(1) (“A indication of firm MaNual out to taxpayer willfully set is that suspicion than mere or first fraud is more the case responsibilities, evade his fraud, determi indication of it is a factual to the CID immedi should be submitted must made on a case nation which be the Examina ately inquiry without a from (“it basis.”); Peters, 153 F.3d at 455 case Division, do tion McKee’s circumstances intent to evade taxes taxpayer’s extraordinary situ give rise to such criminal violation from a differentiates a the Manu disregarding ation. Far from case”).' emphasizes civil The Manual itself complete Loges acted provisions, al’s point: by contacting conformance with them fact which the The second basic Gov- chance to offering and them the McKees fraud is prove ernment must to establish alleged improprieties account for the liability tax that the understatement of source. anonymous the other Pique and to evade due to deliberate intent was alternative, McKee con the fact that income was under- tax. The In terminated not, alone, Loges should have standing prove tends stated does shortly September after evidence investigation is often admissible at a crim- her date of her second interview 1992-the inal trial. days McKee. On or within a few with Mr. nation’s tax system Our collection is date, Loges targeting was and after that voluntary compliance. based on See Gro- Valley in specific Elec- questioning entries wer, 144; Tweel, 816 F.2d at 550 F.2d at asking for documentation ledger tric’s If operating pro- 300. the IRS’s internal Mr. support the entries. McKee also anything cedures afford less than faithful Loges with some records indi- presented guarantees, adherence to constitutional had left out cating that certain items been public then confidence in the will nec- IRS loan account. employee of the essarily be While agree undermined. we “firm hindsight, might have been IRS’s indication of fraud” rule preferable comports requirements to transfer the mat with the of the Constitution, September ter to the after 1992. we encourage do revenue However, nearly every addressing agents court to err protecting on the side of observed, very these issues has courts taxpayers’ they when must defer to the discretion of revenue conduct their investigations. an

agents as to whether initiation of a investigation is warranted. See C. 11 (collecting 153 F.3d at 453 & n. argument McKee’s second is that Loges cases). Loges magis testified before the comply failed to provi- with the Manual that, judge experience, trate in her she requiring preparation sions the of a “Form generally “double her work and check[s]” report, 2797” which the is administrative gives taxpayers investigation under “the form used to investigation refer an to the any opportunity of the doubt and benefit CID. After she and her husband had been at question” all to answer the when she indicted, requested release of her possible discrepancies. uncovers J.A. file, ' audit which government produced at 522. Given the deference that IRS February on 1998. There awas Form agents carry must be afforded to out their file, civil McKees’ audit but it duties, say official that Loges we cannot prepared regards Valley abused her in continuing discretion Electric, personally. the McKees seeking of the McKees and Moreover, the district court found that the explanations discrepancies for the after Form 2797 this case was com- September 1992. pleted working days, not 15 as re- reluctantly. We reach this conclusion It quired by Nevertheless, the Manual. is particularly troubling that almost all of district court determined that the “defen- government’s against evidence have any prejudice dants not suffered aas McKees was handed to practically the CID delay.” result of this at J.A. on a platter silver as a result of the civil provision The relevant investigation. involving Cases similar fac Manual reads as follows: tual judice scenarios as one are not sub Peters; Wadena; If, in short supply. examination, during an examiner Grunewald; Powell; Michaud; Caldwell; discovers a firm indication of fraud on Groder; Kaatz; v. Piper, part United States taxpayer, the tax return (M.D.Ga.1988). F.Supp. preparer, We rec anyone aiding or preparing ognize documents, agents revenue are not of supporting the examiner charged with suspend criminal law enforcement. shall further examination activi- Nevertheless, exemplifies, as this case at the opportunity ties earliest without reality agents disclosing revenue to the taxpayer, taxpay- sometimes perform the representative, employees, same functions of evidence er’s gathering counterparts, as their CID suspension. reason for such The find- ciently honored. Whether or not the reve group with the should be discussed ings DFC, agent completes necessary paper in to make nue and the order manager in the simply or not the facts work as set forth Manual as to whether a decision implicate taxpayer’s fraud referral. You constitutional warrant a criminal does righ your findings by prepar- report ts(6) should (Referral Report Po- ing Form 2797 of Cases) Fraud and sub- tential Criminal IV. findings through your mitting your herein, For the reasons stated McKee’s manager. purpose group conviction is AFFIRMED. to evaluate is to enable Cl referral case and potential the criminal NELSON, Judge, DAVID A. Circuit whether a decide fraud concurring. Accordingly, be undertaken. should your Agent Loges that Form 2797 Because we conclude that important refer- report contain was not shown to have violated the Inter- ral sufficient informa- to make an evaluation. in failing tion to enable Cl nal Revenue Manual to turn the investigation over to the Investi- Criminal Manual, HB Part Internal did, sooner than I am gation Division she 1996) (June added; par- (emphasis IV to express opin- not sure we need an id. at original); see also enthetical implica- what the constitutional ion as to Report”). Referral (“Preparing 4565.21 concluded tions would have been had we proffers can McKee As far as we tell-and the manual. Agent Loges did violate otherwise—the argument suggesting no approach circuits seem to the consti- Other is to function of a Form sole question variety ways, tutional Ex- a smooth transition from the ensure prefera- I am inclined to think it would be once a reve- amination Division to the CID wait for a case where the ble for us to appro- that a referral is agent nue believes actually before manual has been violated Thus, of the Manual priate. provisions our should be in approach we decide what purely to Form 2797 are “ad- pertaining I a case. While concur the court’s ministrative,” promulgated and were not Judge and in most of Jones’ judgment taxpayer. Mapp, for the benefit therefore, join I do not in the 690; opinion, at 420- Lockyer, F.2d at rule of the manual-violation endorsement circuits. I in certain of our sister followed by McKee’s persuaded We are not I suggest think the do not mean conclusory compli assertions that bald wrong; simply I see no reason rule is Form provisions ance with the related to juncture. question at this us to decide protect the citizen’s “required 2797 is rights against self-incrimina Br. at to counsel.” McKee right tion and suspend the revenue has

25. Once Fourth investigation, taxpayer’s

ed her are suffí-

and Fifth Amendment Weiss, bad based on sever- "institutional faith” —was 6. McKee relies on United States v. including (C.D.Cal.1983), irregularities, governmental F.Supp. appears which al to fur- dismissing improper utilization of civil summons of a court to be the instance investigation wholly criminal in na- govern- an because of the ther indictment Moreover, at at 1453-55. least one complete per ture. Id. ment's failure to the Form rejected contention that disregarding court has provisions. Even circuit the Manual’s allegedly deficient 2797 mandates questionable Form issue of whether Weiss court conviction, essentially which is correctly compliance reversal of determined that argument presents to us here. See provisions mandated the Consti- those Michaud, tution, F.2d 42-43 States v. distinguishable because the United Weiss is (1st Cir.1991). engaged finding the IRS had court's —that notes been Pique’s or ed specific more information requested es tips. mant’s McKees, original docu- from the Sep- McKee on Loges met William copies. provided ments instead of the about a Loges inquired tember 1992. $23,800 Valley Electric loan from specific the audit with Loges finally conducted McKees, Mr. McKee admitted to the February and her husband on his work done on personal that was Loges questions directed several there explained further home. He Elec- discrepancies Valley regarding establishing loan document was no formal McKee, why including at tric’s records repay- setting forth interest rate get did not included personal expenses was a Valley Electric plan ment because records. their shareholder/loan not conduct such company and did small Valley four or five Elec- also interviewed if Mr. McKee Loges asked formalities. in the course of her investi- employees tric expenses for paid personal company contact with gation. any She did not have him, negative. in the responded he but during the civil Loges questioned which activities for audit.

Case Details

Case Name: United States v. Iva L. McKee

Court Name: Court of Appeals for the Sixth Circuit

Date Published: Sep 27, 1999

Citation: 192 F.3d 535

Docket Number: 98-5413

Court Abbreviation: 6th Cir.