Court Rules: No Broad Fifth Amendment Right to Avoid Complying with an IRS Summons

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Jason B. Freeman

Jason B. Freeman

Managing Member

214.984.3410
jason@freemanlaw.com

Mr. Freeman is the founding member of Freeman Law, PLLC. He is a dual-credentialed attorney-CPA, author, law professor, and trial attorney.

Mr. Freeman has been named by Chambers & Partners as among the leading tax and litigation attorneys in the United States and to U.S. News and World Report’s Best Lawyers in America list. He is a former recipient of the American Bar Association’s “On the Rise – Top 40 Young Lawyers” in America award. Mr. Freeman was named the “Leading Tax Controversy Litigation Attorney of the Year” for the State of Texas for 2019 and 2020 by AI.

Mr. Freeman has been recognized multiple times by D Magazine , a D Magazine Partner service, as one of the Best Lawyers in Dallas, and as a Super Lawyer by Super Lawyers, a Thomson Reuters service. He has previously been recognized by Super Lawyers as a Top 100 Up-And-Coming Attorney in Texas.

Mr. Freeman currently serves as the chairman of the Texas Society of CPAs (TXCPA). He is a former chairman of the Dallas Society of CPAs (TXCPA-Dallas). Mr. Freeman also served multiple terms as the President of the North Texas chapter of the American Academy of Attorney-CPAs. He has been previously recognized as the Young CPA of the Year in the State of Texas (an award given to only one CPA in the state of Texas under 40).

Court Rules: No Broad Fifth Amendment Right to Avoid Complying with an IRS Summons

On May 5, 2020, the United States District Court for the Eastern District of Texas signed an order holding that there is no broad fifth amendment right to avoid being compelled to comply with an IRS summons. In addition, the court found that the taxpayer asserting the privilege had failed to make a particularized showing of privileged information under the Fifth Amendment or to submit a privilege log, as required.

The case arose from Brian Torrance’s failure to comply with an IRS summons directing Torrance to appear before an IRS agent on a scheduled date to provide testimony and produce various records for examination. After court-ordered enforcement of the summons, Torrance appeared but did not provide the requested documents. He, instead, asserted a broad Fifth Amendment privilege, claiming that all responsive information is privileged because “any of the information surrendered could be used against [him] criminally.”

The court laid out the Fifth Amendment privilege against self-incrimination and its protection against incrimination by one’s own compelled testimony, citing Doe v. United States, 487 U.S. 201, 207 (1998) for the proposition that “the Fifth Amendment would not be violated by the fact alone that [documents] on their face might incriminate the taxpayer.” “Accordingly, for a communication to be privileged under the Fifth Amendment, it must be testimonial, incriminating, and compelled.” (citations omitted.)

The court noted that a taxpayer may assert a claim of Fifth Amendment privilege where there ‘are “substantial hazards of self-incrimination that are real and appreciable, not merely imaginary and unsubstantial,” that information sought in an IRS summons might be used to establish criminal liability.’” “This requires the taxpayer to establish that the privilege applies to each question and/or document, and ‘a blanket claim of privilege is unacceptable.’” (citations omitted.)

The court found that Torrance, however, failed to demonstrate any specific documents with privileged information and that he had also failed to produce a privilege log identifying which documents were purported to contain the privileged information, as required. “Rather, he has simply made a blanket assertion of privilege without making any particularized showing. Consequently, he has failed to meet his burden of showing that specific communications are privileged under the Fifth Amendment.”

Subsequently, the court granted the government’s motion to compel and dismissed Torrance’s motion to dismiss premised on the Fifth Amendment privilege. Torrance was ordered to produce all requested documents and information and produce a privilege log with a description of the nature of the documents to allow the government to assess the privilege claims.

Taxpayers attempting to assert a fifth amendment privilege in response to an IRS summons much take care to properly invoke the privilege.  They must also avoid “blanket” privilege assertions. Without a demonstration of what requested information is purported to be privileged or a privilege log, the taxpayer may find themselves ordered to comply with the summons. If there is a concern about privileged fifth amendment information, taxpayers should include privilege log and be prepared to demonstrate generally which documents are privileged without revealing the privileged information.

Representation in Tax Audits & Appeals

Need assistance in managing the audit process? Freeman Law’s team of attorneys and dual-credentialed attorney-CPAs regularly represents taxpayers before the IRS and Texas Comptroller. Our team also provides tax return-related representations and helps taxpayers navigate state tax laws. Our Firm offers value-driven services and provides practical solutions to complex issues. Schedule a consultation or call (214) 984-3410 to discuss our tax representation services.

 

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