Black-Letter Violations of Tax Law
Some individuals or groups argue that subpoenas sent by the IRS to taxpayers and third parties are in themselves violations of the Fourth Amendment prohibition on search and seizure without a search warrant and are therefore unconstitutional. The Law: The Fourth Amendment to the U.S. Constitution provides for the “right of individuals to be safe in their persons, homes, papers, and property” and prohibits “improper search and seizure.” The U.S. Supreme Court has repeatedly ruled that “the Fourth Amendment does not prohibit the collection of information disclosed to third parties.” United States v. Miller, 425 U.S. 435 (1976). The Fourth Amendment also provides that “no warrant may be issued” unless there is a “probable reason.” The U.S. Supreme Court has ruled that the IRS “does not have to meet a standard of probable reason to obtain the execution of an [IRS] subpoena.” United States v. Powell, 379 U.S. 48, 52 (1964). When the execution of an IRS subpoena is challenged, the IRS bears the initial burden of demonstrating “good faith compliance with the requirements of the subpoena,” which “may be demonstrated by the IRS officer`s affidavit.” United States v. Norwood, 420 F.3d 888 (Cir. 8, 2005).
Relevant case law: United States v. Miller, 425 U.S. 435, 443-44 (1976) – The Supreme Court reiterated that the “Fourth Amendment does not prohibit the collection of information disclosed to third parties.” United States v. Powell, 379 United States 48, 52 (1964) – The Supreme Court has ruled that “the government is not required to prove a probable reason to suspect fraud unless the taxpayer raises a substantive issue that judicial enforcement of the administrative summons would be an abuse of judicial process.” Taliaferro v. Freeman, 595 F.App`x 961, 962-63 (Cir. 11, 2014) – The 11th District noted that the taxpayer`s claim that IRS levies violate the Fourth Amendment right to be free from inappropriate seizures was “simply unfounded” and did not even warrant discussion and ordered sanctions against the taxpayer up to twice the amount of government costs. O`Brien v. Green, 114 A.F.T.R.2d (RIA) 2014-5613 (E.D. Va. 2014) – the Court rejected O`Brien`s Fourth Amendment arguments and called them frivolous. Nevius v.
Tomlinson, 113 A.F.T.R.2d (RIA) 2014-1872 (W.D. Miss. 2014) – Nevius argued that IRS subpoenas issued without probable reason for a warrant violate the Fourth Amendment. The court rejected this argument, stating, “The IRS does not have to meet a standard of probable reason to obtain the execution of a subpoena.” Lewis v. United States, 109 A.F.T.R.2d (RIA) 2012-1756 (E.D. Circa 2012) – The court rejected Lewis` argument that subpoenas sent to third parties violated the Fourth Amendment, noting that “subpoenas issued by the IRS to obtain documents in the possession of third parties do not imply the plaintiff`s rights under the Fourth Amendment.” United States v. Lund, 108 A.F.T.R.2d (RIA) 2011-7513 (D. Or. 2011) – Lund argued that IRS subpoenas violate the Fourth Amendment. The court rejected that argument, stating that a subpoena “does not in itself constitute a violation of the Fourth Amendment.” In an 1831 case before the U.S.
Supreme Court, Jackson ex dem. Bradstreet v. Huntington, the expression “black letter” was used: “It is rare that a case in our time benefits so much from the black letter; but the course of decisions in New York makes it inevitable… ».  The term “law of the black letter” was used in Naglee v. Ingersoll, at p. 7. 185 (1847). The term does not come from the connection to Black`s Law Dictionary, which was first published in 1891.
Instead, it probably refers to the practice of writing legal books and citing legal precedents in black letters, a tradition that survived long after the switch to Roman and Italic texts for other printed works. Apart from their individual assets, facts and circumstances, what else should we learn from these cases? We still have a long way to go before any of them and the problems they raise are fully resolved. However, it is clear that many lower court judges are not in the mood to give carte blanche to the Treasury and the IRS because they do not pay enough attention to the procedural requirements of the APA, even though the violations have gone on for many years, if not decades. Despite last May`s Supreme Court decision in CIC`s services case, long-standing agreements on legality restrictions under the Anti-Injunction Act mean that taxpayers often did not have the opportunity to seek judicial review of Treasury regulations and IRB guidelines until they came into force long after they came into force. This restriction of legality meant fewer disputes from the outset, but at the expense of other potential circumstances. Unfortunately for the tax system, the inability of the Treasury Department and the IRS to pay close attention to their obligations under the APA for decades means that many Treasury regulations and IRB guidelines are questionable. Politics is important, but so is procedure. In common law jurisdictions, black-letter laws are the established rules of law that are no longer subject to reasonable litigation.  Some examples are the “Black Letter Act”, which must take into account the conclusion of a contract, or the “Black Letter Act”, according to which the registration of a trademark requires an established use in the course of business. Black letter law can be compared to legal theory or unresolved legal issues. If subscribers cancel within 30 days of ordering or receiving the product and return the product at their expense, they will receive a full credit of the annual subscription price. The Liberty Global order reflects the opinion of a single federal district judge, and the government is subject to appeal the decision to the Tenth District.
Although other judges have rejected the interpretation of Treasury Department Section 7805(e), no court dealing with the matter has adopted it. The slow but steady buildup of authority in favor of a harmonized reading of Section 7805(e) and the APA should prompt the Treasury Department to pay more attention to the requirements of the APA. The most recent decision regarding taxes and APA was a federal district court order granting partial summary judgment in Liberty Global, LLC v. the United States declaring that the Treasury Department`s temporary regulations issued under Section 245A were in violation of the procedural requirements of the APA. Readers will probably recall that for many years, the Treasury regularly issued temporary regulations without notice or comment, postponing these procedures until afterward. Since 1996, section 7805(e) requires the Department of the Treasury, when issuing temporary settlements, to also issue notice of the development of the proposed rules and complete the temporary settlements within three years. The APA expressly empowers agencies to refrain from notifications and comments when issuing regulations if they simultaneously determine that these procedures would be “impracticable, unnecessary or contrary to the public interest,” also known as the just cause exception. However, until 2019, the Department of Finance was not in the habit of making a good case when it issued temporary regulations of the Department of Finance. Instead, the Treasury Department relied first on its belief that most Treasury regulations as interpretative rules were completely exempt from notification and commentary procedures, and then on its interpretation of Section 7805(e) as allowing Treasury temporary settlements without proof of good reason — positions that the Internal Revenue Manual still asserts.