Ninth Circuit Interprets Fifth Amendment’s “Foregone Conclusion” Exception in IRS Summons Enforcement Case

Jan 10, 2013   
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On January 8, 2013, the United States Court of Appeals for the Ninth Circuit affirmed the decision of the U.S. District Court for the Northern District of California in the case of United States v. Sideman & Bancroft LLP.  A copy of the slip opinion is available here.

The facts of the case are as follows:

A taxpayer was under investigation by the Criminal Investigation Division of the Internal Revenue Service.  As part of that investigation, the IRS obtained a search warrant to locate the taxpayers tax documents. On October 13, 2010, the IRS executed the search warrant, looking for the documents in taxpayers residence, business, and car. The IRS failed to locate the documents while executing the search warrant but did find references to the taxpayers accountant.  The IRS then contacted the accountant who indicated that the taxpayer had given her tax documents.  The accountant explained that she no longer had the documents as she had delivered them to the taxpayers civil tax attorney.  The IRS subsequently contacted the tax attorney who informed the IRS that he had given the documents he received from the accountant to the taxpayers criminal tax attorney.

The IRS then drafted a summons to obtain the records from the taxpayers attorneys. The IRS described the documents based on the detailed description of the documents provided to the IRS by the accountant.  On October 27, 2010, the IRS issued a summons to the taxpayers tax attorneys seeking the tax documents turned by the accountant.

The taxpayers tax attorneys refused to produce the documents because, according to the tax attorneys, the production would violate the taxpayers Fifth Amendment rights. In general, the Fifth Amendment prohibits a criminal defendant from being forced to testify against himself, and it is well settled that that this protection extends not only to oral questioning but also applies to prevent an individual from having to produce documents if the act of production itself would be testimonial. This protection also extends to prevent an individuals attorney from being compelled to produce documents if that production would violate the individuals Fifth Amendment rights.

In response, the IRS filed a petition in the Northern District of California seeking enforcement of the summons. The district court granted the IRSs petition to enforce, finding that the summonsed documents fell within the “foregone conclusion” exception to the Fifth Amendment. This exception generally provides that if it is a “foregone conclusion” that records exist and are possessed by a person, producing them in response to a subpoena is not sufficiently testimonial to merit Fifth Amendment protection.

On appeal, the taxpayer relied on the case of Fisher v. United States, 425 U.S. 391 (1976), available here, where the Supreme Court explained that where an individual transfers documents to his or her attorneys to obtain legal assistance in tax investigations, those documents, “if unobtainable by summons from the client, are unobtainable by summons directed to the attorney by reason of the attorney-client privilege.”

However, the Fisher court also held that “where Ëœ[t]he existence and location of the papers are a foregone conclusion and the taxpayer adds little or nothing to the sum total of the Governments information by conceding that he in fact has the papers[,] . . . enforcement of the summons does not touch upon constitutional rights.” In this case, based on the information provided by the taxpayers accountant to the IRS, the Ninth Circuit noted that the District Court found the IRS had precise knowledge of the location of the boxes containing folders and the documents, and knew with “reasonable particularity” the existence and the tax attorneys possession of the taxpayers tax records prior to issuing the summons. Thus, the Ninth Circuit ruled that the district court correctly applied the “foregone conclusion” exception and affirmed its decision.

Among other things, this case teaches that disclosures of information by accountants and lawyers to the IRS during the course of a criminal investigation may negatively impact a taxpayers case.  Taxpayers, accountants, and attorneys must all be diligent in protecting and preserving claims of privilege against the Government.

The attorneys at Fuerst Ittleman David & Joseph have extensive criminal and civil tax litigation experience including petitions to quash IRS summons and petitions to quash grand jury subpoenas.  You can contact us by email at or by calling us at 305.350.5690.