REISMAN V. CAPLIN, 375 U. S. 440 (1964)

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U.S. Supreme Court

Reisman v. Caplin, 375 U.S. 440 (1964)

Reisman v. Caplin

No. 119

Argued December 12, 1963

Decided January 20, 1964

375 U.S. 440


Petitioners, attorneys for taxpayers Mr. and Mrs. Bromley, seek declaratory and injunctive relief against the Commissioner of Internal Revenue and an accounting firm which, at the instance of petitioners, has been working on the financial records of the Bromleys. Petitioners claim as null and void summonses issued to the accounting firm by the Commissioner, under § 7602 of the Internal Revenue Code of 1954, directing the production, before a hearing officer, of "all audit reports, work papers and correspondence" in the firm's custody pertaining to Mr. Bromley and his several business interests. The contention is that the enforced production of the papers is an unlawful appropriation of petitioners' work product and trial preparation as well as an unreasonable seizure requiring the Bromleys to incriminate themselves and depriving them of the effective assistance of counsel.

Held: Petitioners have an adequate remedy at law, and the complaint is properly dismissed for want of equity. Pp. 375 U. S. 445-450.

1. A witness or any interested party may attack before the hearing officer, on constitutional or other grounds, a summons issued under § 7602. P. 375 U. S. 445.

2. Any action to enforce a summons issued under § 7602 must be commenced in a District Court or before a United States Commissioner; such enforcement action would be an adversary proceeding affording a judicial determination of the challenges to the summons and giving complete protection to the witness. Pp. 375 U. S. 445-446.

3. The contention that the penalties of contempt risked by a refusal to comply with the summonses are so severe that the statutory procedure amounts to a denial of judicial review cannot be sustained, since noncompliance is not subject to prosecution under § 7210 when the summons is attacked in good faith. Pp. 375 U. S. 446-447.

4. The provision of § 7604(b) for an "attachment . . . as for a contempt" is applicable only to persons who are summoned and

Page 375 U. S. 441

wholly make default or contumaciously refuse to comply. Pp. 375 U. S. 447-448.

5. In the procedures before either the district judge or a United States Commissioner, the witness may challenge the summons on any appropriate ground, including the defenses that the material is sought for the improper purpose of obtaining evidence for use in a criminal prosecution, as well as that it is protected by the attorney-client privilege. P. 375 U. S. 449.

6. Also, in any such procedures, third parties may intervene to protect their interests, or, in the event the taxpayer is not a party to the summons before the hearing officer, he too may intervene. P. 375 U. S. 449.

7. Orders of a district judge or United States Commissioner in an attachment procedure under § 7604(b) are appealable, and, with a stay order, a witness would suffer no injury while testing the summons. P. 375 U. S. 449.

8. The remedy specified by Congress works no injustice, and suffers no constitutional invalidity, wherefore the parties here are remitted to the comprehensive procedure of the Code, which provides full opportunity for judicial review before any coercive sanctions may be imposed. P. 375 U. S. 450.

115 U.S. App.D.C. 59, 317 F.2d 123, affirmed on other grounds.

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