Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

UNITED STATES v. LIEBERT

October 22, 1974

UNITED STATES OF AMERICA
v.
PETER P. LIEBERT, III



The opinion of the court was delivered by: LORD, III

 Defendant Liebert has been charged with failure to file income tax returns for the years 1967, 1968 and 1969. On February 28, 1974, he filed a motion pursuant to Rule 16(b), Federal Rules of Criminal Procedure, seeking discovery of certain computer lists used in conjunction with Internal Revenue Service forms 3941 and 4901. The motion was granted on May 16, 1974. Subsequently, upon learning that the Commissioner of Internal Revenue had decided that the lists were not discoverable, the government moved for reconsideration, citing non-disclosure statutes and alleging lack of materiality and unreasonableness. For the reasons set out below, I shall deny the government's motion.

 I

 The lists sought by defendant purport to identify taxpayers who apparently have not filed tax returns for the years 1970 and 1971. He intends to use these lists to locate persons who actually filed returns for those years, but were nonetheless erroneously listed as non-filers. Defendant claims that the testimony of such persons would "* * * demonstrate * * * that the Internal Revenue Service indices [used to identify non-filers] are totally unreliable." (Defendant's Brief in Opposition to Motion for Reconsideration, p. 9). The government argues that disclosure of the lists is forbidden by provisions of the Internal Revenue Code (26 U.S.C. §§ 7213(a) and 6103(a), Criminal Code (18 U.S.C. § 1905), and Treasury Regulations (§ 301.6103a, 26 C.F.R. § 301.6103a).

 Title 26 U.S.C. § 7213(a) bars disclosure by federal employees of data set forth in tax returns. Title 18 U.S.C. § 1905 is a more general statute which forbids disclosure of any confidential information "coming to [a federal employee] in the course of his employment * * *." Both statutes specifically prohibit examination of "any income return * * * or any book containing any abstract * * * thereof." The government contends that the lists of non-filers are "abstracts prepared from information on tax returns" (Government's Brief in Support of Motion for Reconsideration, at p. 3), and thus fall within the statutory ban.

 In light of the fact that defendant seeks neither returns nor information contained on returns, the government's characterization is untenable. However, even if the statutory language were interpreted to encompass the lists, the requested discovery would still be well within the judicial power. Neither 26 U.S.C. § 7213(a) nor 18 U.S.C. § 1905 raises an absolute prohibition on disclosure. Each statute contains the limiting phrase, "except as provided by law." In BLAIR, COMMISSIONER v. OSTERLEIN MACHINE COMPANY, 275 U.S. 220, 72 L. Ed. 249, 48 S. Ct. 87 (1927), the Court was faced with similar language in 18 U.S.C. § 216, a predecessor of both the above sections. The Commissioner of Internal Revenue had refused to comply with a subpoena, issued by the Board of Tax Appeals, which requested certain information contained in the tax returns of twelve corporations. *fn1" The Commissioner asserted that disclosure of such information was forbidden by § 216. The Court disagreed:

 
"The prohibition is limited to disclosures made 'in any other manner than may be provided by law '. It cannot be deemed to forbid disclosures made in obedience to process lawfully issued in a judicial * * * proceeding * * *." 275 U.S. at 227.

 Thus it is clear that the phrase "except as provided by law" contemplates court-ordered disclosure. See also FRAZIER v. PHINNEY, 24 F.R.D. 406, 409 (S.D. Texas, 1959). The government has not cited, nor am I able to find, any case which holds otherwise. *fn2"

 The Internal Revenue Code § 6103 (26 U.S.C. § 6103) covers two distinct topics, (1) the publicity of the contents of returns, and (2) the disclosure of whether or not a person has filed a return. The former is dealt with in subsections (a)-(d). Subsection (a), captioned "Public Record and Inspection ", is cited by the government as controlling defendant's request. It provides that inspection of tax returns shall be governed by regulations prescribed by the Secretary of the Treasury or his delegate and approved by the President. *fn3"

 Without more, the applicability of this subsection and the regulations promulgated under it is at best questionable, since, as stated earlier, defendant does not seek to inspect tax returns, but merely to discover lists of names. Any doubt, however, is resolved by subsection (f), which deals with the second topic covered by § 6103. Before 1966, subsection (f) required that lists containing the name and address of each person who had filed a return in a particular district be maintained for public inspection in that district. In 1966 Congress amended this subsection, eliminating the public lists, and providing that,

 
"The Secretary or his delegate shall, upon inquiry as to whether any person has filed an income tax return in a designated internal revenue district for a particular taxable year, furnish to the inquirer, in such manner as the Secretary or his delegate may determine, information showing that such person has, or has not, filed an income tax return in such district for such taxable year."

 The government asserts that by substituting the specific inquiry method in place of the lists Congress intended that the lists be kept confidential.

 The amendment to subsection (f) was included in a comprehensive Bill (P.L. 89-713) which modernized the I.R.S. automatic data processing system. Senate Report No. 1625, 3 U.S. Code Congressional and Administrative News p. 3676, 89th Congress, Second Session, 1966, which accompanied the Bill, is revealing. The Report explains that as part of this modernization, the lists of non-filers were no longer to be kept in their original form, but were instead to be put on microfilm. Since making the microfilm and related reading equipment available to the public was felt to be impractical, Congress instituted the specific inquiry procedure. The Report is clear that the Congressional desire for ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.