The opinion of the court was delivered by: Hon. Hugh B. Scott
Before the Court are various motions in limine by the Government (Docket No. 40) and to quash subpoena duces tecum upon the Commissioner of Internal Revenue ("Commissioner") (Docket No. 41*fn1 ) and defendant's motion in limine (Docket Nos. 34, 43). These motions are related to defendant's overall contention in this case--that he relied upon the advice of others and that the Internal Revenue Service ("IRS") disregarded those parties when they sought an explanation of defendant's duty to file. This Order addresses the Government's motion to quash the subpoena (Docket No. 41).
Jury selection for this trial will begin on January 30, 2008. Also pending is the Government's initial motion in limine (Docket No. 8) seeking leave to introduce defendant's 1995-99 tax and financial records.
Defendant was indicted on March 22, 2007, on four counts of willful failure to file tax returns for tax years 2000-2003, in violation of I.R.C. § 7203 (Docket No. 1, Indictment), a misdemeanor with a fine of no more than $25,000, and imprisonment of up to one year, I.R.C. § 7203. The Government alleges that defendant, a chiropractor, had a gross income totaling over $225,000 (id. ¶¶ 2, 4) and willfully failed to file tax returns.
In discovery, defendant sought production of the items it now seeks in the subpoena (Docket No. 9). Defendant sought three classes of documents: IRS guidelines regarding the handling of non-filers such as defendant; IRS form letters and other correspondence sent to non-filers; and IRS arguments to contentions raised by American Rights Litigators ("ARL"), the organization defendant granted power of attorney for tax matters in the years at issue. Defendant argued that these documents were material to the preparation of his defense, "which will principally center upon the defendant's retention of a tax protestor organization known as American Rights Litigators ['ARL'] in early 1997 to represent his interests before" the Internal Revenue Service ("IRS" or the "Service")" (Docket No. 10, Def. Memo. at 1). Defendant filed powers of attorney ten times with the IRS naming ARL as his agent, but the Service ignored defendant's communications (id. at 1-2). The discovery defendant sought would show how the IRS treated similar non-filers and filers who used ARL or ARL's tax protest arguments in opposing filing tax returns. The Court held that defendant failed to establish the materiality of the documents sought under Federal Rule of Criminal Procedure 16 for pretrial disclosure (Docket No. 17, Order of Aug. 21, 2007, at 8-9). In particular, the Court found that "Although not asserting a selective prosecution argument, defendant contends that the IRS, through its guidelines and other policies, may have responded to non-filers in a certain way while not responding to defendant's repeated inquiries (either by him or through ARL) (see Docket No. 10, Def. Memo. at 3). It is not clear whether IRS policies or forms of communication applicable to non-filers are material to the elements of the offense charged against defendant, namely whether he intended not to file his tax returns. As for IRS responses to ARL's arguments for other taxpayers, again it is not material to the Government's case-in-chief or the defense in this prosecution. The fact that the Service may have responded to ARL's arguments for others has no bearing on defendant in this action." (Id.) That motion was denied (Docket No. 17) and upon reconsideration (Docket No. 22). The latter Order did note that some aspects of defendant's discovery was relevant to the ultimate issue of his mens rea, such as IRS guidelines for dealing with those who question the filing of tax returns and IRS responses to arguments raised by ARL (Docket No. 22, Order at 8; Docket No. 43, Def. Atty. Affirm. ¶ 39).
In his subpoena, defendant sought
(1) All written guidelines, circulars and/or instructions of the Internal Revenue Service in effect from January 1, 1996 through April 15, 2004 relating to how Service personnel should respond to non-filer communications.
(2) All written guidelines, circulars and/or instructions of the Internal Revenue Service in effect from January 1, 1996 through April 15, 2004 relating to how Service personnel should respond to non-filer communications from individuals or entities identified by the IRS as tax protesters.
(3) All form letters, memos and other correspondence of the Internal Revenue Service utilized by the IRS from January 1, 1996 through April 15, 2004 in responding to non-filer communications.
(4) All form letters, memoranda, and other correspondence of the Internal Revenue Service utilized by the IRS from January 1, 1996 through April 15, 2004 in responding to non-filer communications from the tax protestor organization known as American Rights Litigators ("ARL")
(5) All non-internal memoranda, reports or other writings disseminated to the public on or before April 15, 2004 by the Internal Revenue Service in response to non-filing arguments raised by the tax protester organization known as American Rights Litigators ("ARL"). (Docket No. 43, Def. Atty. Affirm. Ex. D.)
The Government moves to quash under Federal Rule of Criminal Procedure 17(c)(2), arguing that this material was denied as discovery under Rule 16 and the subpoena process should not be used as a discovery device (Docket No. 41, Gov't Motion at 2). Defendant filed opposing papers (Docket Nos. 43, 51), and the parties argued the motion during the final pretrial conference on January 25, 2008 (see Docket No. 26), and the Court deemed the motion submitted as of that date. At the final pretrial conference, ...