The opinion of the court was delivered by: Christopher Conner, District Judge
Presently before the court is the United States' motion to compel (1) responses to interrogatories, (2) responses to requests for admissions, and (3) the production of documents. (Doc. 45). Defendant, Thurston Paul Bell ("Bell"), has interposed numerous objections to the United States' discovery requests. Specifically, Bell raises objections based upon the Fifth Amendment "act of production" privilege, the Fourth Amendment right to privacy, the First Amendment freedom of association, the work product privilege, trade secrets protection and the statutory protection set forth in 5 U.S.C. § 552(a).
Bell's objections are memorialized in a fifty-five (55) page answer to plaintiff's first set of interrogatories, requests for production of documents and requests for admissions (Doc. 46, Exhibit "B") and in a seventy-five (75) page "Statement of Priviledges (Sic) and Objections Regarding Documents Presented [ Page 2]
for In-camera Review." (Doc. 117). With one exception*fn1, these statements object to each of the United States' discovery requests under the rubric of privilege as previously described. In light of the issues raised by Bell's objections, the court issued an order directing Bell to produce all contested documents to the court for in camera review. (Doc. 69). The order also required Bell to provide the court "with an index of the documents and a brief statement regarding each document and why he believes he need not produce it to the Plaintiff." Id. See, e.g., U.S. v. Grable, 98 F.3d 251, 257 (6th Cir. 1996) (district court should individually review in-camera any documents to which a summoned party raises Fifth Amendment objections).
The facts of this case are set forth in the court's memorandum dated January 10, 2003. (Doc. 90). See U.S. v. Bell, 238 F. Supp.2d 696 (M.D. Pa. 2003). However, certain facts deserve emphasis and reiteration.
Defendant Bell is a tax protestor. He owns and operates the "National Institute for Taxation Education" ("NITE"). Through NITE, Bell advertises and sells the fallacious "U.S. Sources" or "Section 861" argument. Essentially, Bell sells the false tax advice that American citizens are not required to pay federal [ Page 3]
income tax on domestically earned income. In the context of Bell's Fifth Amendment objections, it must be emphasized that Bell admits to providing tax advice through NITE (N.T. 47) "on the edge of what would be seen as legal. . . ." (N.T. 28). Bell openly espouses and promotes an abusive tax scheme built on concepts repeatedly rejected by the federal courts. See Bell, 238 F. Supp.2d at 700-01.
Bell's marketing ploys are aggressive and audacious (and patently false), such as the following claim found on the NITE website:
Unlike others who peddle arguments that may sound
similar on the surface, our strategies have proven
success, as the Internal Revenue Service (IRS)
itself (as well as U.S. Attorneys and Federal
Judges) has accepted NITE's arguments as valid,
and has provided full refunds to NITE Members who
use our strategies.
(See Doc. 46, Exhibit "A", p. 20.)
Bell receives remuneration from individual clients and members of NITE for his tax advice through direct hourly billing ($125 per hour, Doc. 36, Exhibit "C", p. 109) and through NITE member fees. (See Doc. 36, Exhibit "C"). Bell assists his clients in the preparation of zero income tax returns with an "asseveration of claimed income" attached, disputing the amount of gross income reflected on the taxpayer's W-2 forms. (Doc. 36, Exhibit "K", p. 53). See also N.T. 58-60. Many of the documents in dispute are communications from Bell's clients requesting [ Page 4]
assistance in the preparation of various income tax forms or responses to notices and correspondence generated by the Internal Revenue Service.
Bell's discovery objections must be analyzed in the context of these well-known facts about Bell's abusive tax scheme and his aggressive promotion of it.
One additional fact is pertinent to the court's analysis of Bell's discovery objections. The court finds that Bell is an "income tax return preparer" as defined in Treas. Reg. § 301.7701-15(a) (1). 26 C.F.R. § 301.7701-15(a) (1). The record clearly reflects that Bell has furnished advice to taxpayers in such a fashion that the completion of the return or claim for a refund is largely a clerical matter. (See Doc. 36, Exhibit C passim). Accordingly, Bell is required to:
(1) retain a completed copy of such return or
claim, or retain, on a list, the name and
taxpayer identification number of the taxpayer
for whom such return or claim was prepared,
(2) make such copy or list available for inspection
upon request by the Secretary.
26 U.S.C. § 6107(b).
III. BELL'S OBJECTIONS TO THE UNITED STATES' REQUEST FOR PRODUCTION OF DOCUMENTS
Plaintiff seeks 18 separate categories of materials in its Rule 34 request for production of documents. As previously stated, Bell has interposed objections to all 18 categories of materials on the basis of Fifth Amendment privilege. He has also interposed objections to 13 of the 18 categories on the basis of "individual and [ Page 5]
associational First Amendment protections." Bell has also objected to the production of certain categories of documents based upon a Fourth Amendment right to privacy, the work product privilege, trade secret protections and the statutory protections of 5 U.S.C. § 552a.
The court's in camera review has been complicated by several factors. First, the contested materials are voluminous; defendant has presented the court with 16 banker's boxes full of documents, videotapes and computer disks. These boxes contain over 25,000 pages of documents, and ostensibly include every document or electronic or videographic recording acquired by Bell in connection with his operation of the National Institute for Taxation Education ("NITE") website or in furtherance of his tax counseling services to "members" of NITE.
Second, the documents are loosely organized; Bell has provided an index with only the most basic description of the documents produced. The court has been required to review and to evaluate each item, folder by folder, page by page and bit by bit, to divine the logic of defendant's groupings; in the case of certain documents, there is no logic to defendant's groupings.
Third, Bell has not complied with the court's directive to provide a brief statement of privilege regarding each document. Instead, Bell has lumped together hundreds and, in some cases, thousands of pages of documents (or electronic material) and provided only generalized reasons for non-disclosure. In essence, ...