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United States v. Trowbridge

United States District Court, S.D. Texas, Houston Division

November 22, 2017




         Pending before the Court is the Request for Grant of Immunity Against Potential Self-Incrimination filed by Respondent John Parks Trowbridge, Jr. (Doc. No. 14.) Petitioner, the United States of America through the Internal Revenue Service (IRS), has filed a Response out of time, as well as a motion asking this Court to accept its late response. (Doc. Nos. 16, 17.) Based on consideration of the filings and applicable law, the IRS's motion for acceptance of its late response is granted, and Respondent Trowbridge's request is denied.

         I. BACKGROUND

         This is not the first fight between these litigants to find its way into federal court. See, e.g., Trowbridge v. Internal Revenue Service, No. 4:13-cv-1850 (S.D. Tex. 2013-14); United States v. Trowbridge, No. 4:99-mc-387 (S.D. Tex. 1999-2001). The story goes back at least to 1996, when the IRS conducted an examination concerning tax years 1991 to 1995. (Doc. No. 21 at 13.) Other examinations and investigations followed, including an apparently long-lasting criminal investigation. (Id. at 16.)

         In Trowbridge's telling, his issues arise from the IRS's “fail[ure] to identify any particular statute that makes [him] liable to tax.” (Id. at 15.) He says he has repeatedly asked the IRS to identify its statutory taxing authority, and he insists that no federal authority has ever attempted to answer his question. (Id. at 17.) Without specific guidance, the complexity of the Internal Revenue Code is too great, and so he “cannot in good conscience or under penalty of perjury” file a tax return. (Id. at 16.) The patent frivolousness of these and other arguments has brought Trowbridge consistent defeat--as well as sanctions, oftentimes--in previous disputes. See United States v. Trowbridge, 591 F. App'x 298 (5th Cir. 2015); Trowbridge v. C.I.R., 378 F.3d 432 (5th Cir. 2004); United States v. Trowbridge, 251 F.3d 157 (5th Cir. 2001).

         The present dispute reached this Court in June 2017, when the IRS filed a petition to enforce a summons for Trowbridge to appear, testify, and produce documents so that his tax liability for the years 2011 to 2014 could be calculated. (Doc. No. 1.) This Court issued an Order to Show Cause (Doc. No. 2) and, after a hearing, an order compelling compliance with the IRS's summons (Doc. No. 11). The Court also denied motions for dismissal and summary judgment that Trowbridge had filed in the interim. (Doc. Nos. 4, 10.)

         On October 2, 2017, Trowbridge appeared at the IRS's office to meet with Revenue Agent Kendria Bruno and Special Counsel Lewis Booth. (Doc. No. 15 at 4-5.)[1] Early in their interview, before Bruno or Booth had raised any specific issues, Trowbridge sought assurance that he would not face criminal prosecution. (Id. at 9.)

         Booth explained that Bruno worked on the civil side of the IRS and wanted only to determine Trowbridge's tax liability. (Doc. No. 15 at 9.) He clarified that no criminal investigation was underway and no referral had been made to the U.S. Department of Justice. (Id. at 9-10.) Booth refused, however, to guarantee that a criminal prosecution would never occur, given the possibility that the investigation could uncover “a clear violation of the criminal statutes.” (Id. at 9.) He then informed Trowbridge of United States v. Tweel, 550 F.2d 297 (5th Cir. 1977), which excludes evidence in criminal prosecutions obtained by deliberately deceiving the defendant about the criminal nature of an investigation against him or her.

         Booth's explanation of the distinction between civil and criminal investigations went on at some length. (Doc. No. 15 at 9-36.) Booth and Trowbridge also discussed and disagreed on the application of the Fifth Amendment privilege against self-incrimination. (Id. at 36-41.) Bruno then took over. Her questions about Trowbridge's place of residence prompted Trowbridge to invoke the Fifth Amendment. (Id. at 51.) Trowbridge then answered certain questions and invoked the Fifth Amendment for others. (Id. at 52-62.) Finally, Trowbridge refused to produce any documents for the same reason he refused to answer questions, which brought the interview to an end. (Id. at 62-63.)

         During the interview, Trowbridge also tried to make his core argument against tax enforcement--the IRS's failure to identify “which tax would be applied” to him, among the many on the statute books. (Doc. No. 15 at 42.) Unlike the protracted discussion of the distinction between civil and criminal proceedings, discussion of this idea was brief. Booth cut Trowbridge off, warning that he was “veering close to arguments that the Government thinks may be frivolous in nature.” (Id. at 43.)


         The U.S. Constitution gives Congress the power to lay and collect taxes. U.S. Const. Art. 1, § 8, cl. 1. The Sixteenth Amendment specifically authorizes taxes on incomes. U.S. Const. amend. XVI. The statutory framework for levying, calculating, and collecting taxes is the Internal Revenue Code, found in Title 26 of the U.S. Code. The Internal Revenue Code gives district courts “jurisdiction by appropriate process to compel [the] attendance, testimony, or production of books, papers, or other data” of “any person summoned under the internal revenue laws.” 26 U.S.C. § 7402(b). Another provision, 26 U.S.C. § 7604(a), confers the same authority. “[T]he effective operation of the revenue system requires that the Commissioner [of Internal Revenue] be free to inspect taxpayers' records in order to ensure compliance with the revenue laws.” United States v. Roundtree, 420 F.2d 845, 850-51 (5th Cir. 1969).

         “[T]ypically it is unclear whether a given tax investigation will lead to criminal proceedings. The IRS often must see the taxpayer's records before it can make that determination.” Roundtree, 420 F.2d at 850 (citing United States v. Powell, 379 U.S. 48, 53-54 (1964)). “It would be a misuse of the tax summons for the IRS to endeavor to use it to obtain evidence for use in an existing criminal prosecution.” Venn v. United States, 400 F.2d 207, 210 (5th Cir. 1968). In addition, “if the purpose of the summons is … solely to build a criminal prosecution, the courts will not enforce the summons.” Roundtree, 420 F.2d at 847. “However, the mere fact that the evidence obtained through the summons may later be used against the taxpayer in a criminal prosecution is no barrier to enforcement [of the summons].” Venn, 400 F.2d at 210-11.

         When the Fifth Amendment privilege against self-incrimination is asserted under these circumstances, “the burden of proof is on the taxpayer.” Roundtree, 420 F.2d at 851 (citing Powell, 379 U.S. at 58). The privilege against self-incrimination “applies only when the possibility of self-incrimination is a real danger, not a remote and speculative possibility.” Steinbrecher v. C.I.R., 712 F.3d 195, 197 (5th Cir. 1983) (citing Zicarelli v. New Jersey StateComm'n of Investigation, 406 U.S. 472, 478 (1972)). “The witness is not exonerated from answering merely because he declares that in doing so he would incriminate himself--his say-so does not of ...

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