Can the Taxpayer Bill of Rights Assist in Overturning a Criminal Conviction?
That’s the short answer. We have written before about ability, or lack of ability, of the Taxpayer Bill of Rights (TBOR) to protect someone from IRS action or inaction that the taxpayer views as a violation of TBOR here, here and here. I wrote a law review article on this subject you can read here. It was part of a symposium at Temple a couple years ago that looked at TBOR broadly.
In the case of United States v. James D. Pieron Jr., No. 1:18-cr-20489 (E.D. Mich. 2021), the taxpayer sought to raise TBOR to overturn his conviction. In a result that seems rather predictable, the court denied his motion. While the result provides no surprises, this is the first case I have noticed where a taxpayer sought to use TBOR to find protection from criminal prosecution or conviction and deserves some mention because of that. While Mr. Pieron’s lawyers, who seemed to be a bit of a revolving door, score points for inventiveness, the court did not spend too much time disposing of this argument.
Mr. Pieron was convicted of tax evasion related to the sale of a business and his failure to pay the tax on the significant gain resulting from the sale. During the trial he put into evidence, over the objection of the IRS, the TBOR list. I have not read the pleadings but from the statements by the court, I believe that the core of his argument relates to the failure of the IRS to provide him with information. I am guessing, but he may have been frustrated during the criminal investigation that the rest of the IRS would not talk to him and would not provide him with information. This is normal IRS practice. If a revenue agent is auditing a taxpayer and reaches the point of deciding that criminal prosecution is warranted, the agent will go silent, not wanting to use the civil process to build a criminal case. At some point out of the silence will emerge the special agent whose only focus is determining if a criminal case exists. Only at the end of the criminal case does the revenue agent return to the scene. A frustrated taxpayer seeking information when the revenue agent goes silent but before the special agent appears may feel that a violation of the right to know has occurred. It’s possible that the taxpayer alleged other violations of TBOR but this is the one that appeared to be the core of the concern.
The district court did not find this to be a concern that should cause the overturning of the conviction. It stated:
Defendant has, throughout these proceedings, attempted to portray his prosecution as the undue product of an unresponsive bureaucratic machine that has refused to engage with him in any reasonable way. During the cross-examination of IRS Revenue Agent Robert Miller, defense counsel introduced the Taxpayer Bill of Rights and attempted to elicit testimony regarding its application. See ECF No. 51 at PageID.423–26. Defendant’s primary contention seemed to be that the IRS had wrongfully entered a “freeze code” in his case that prevented any communication between him and the IRS once the criminal investigation was pending. Id. at PageID.422–23. Over the objection of the Government, the Taxpayer Bill of Rights was admitted into evidence. Id. at PageID.425. Defense counsel later referenced the Taxpayer Bill of Rights in closing argument while discussing Defendant’s alleged mistreatment. Defendant’s briefing is likewise replete with alleged instances of IRS misconduct, including the Service’s apparent failure to provide him with notice of his tax deficiency or meet with him and his accountant to resolve his tax liabilities.
In some ways, the taxpayer wants to be relieved of his conviction because the IRS followed the rules laid down in prior criminal cases that require it to stop its civil activities once it reaches the point of believing a crime might have occurred. He seeks to pit TBOR against the rules designed to protect taxpayers from an end run around criminal notification. Alternatively, he argues that the IRS should continue its civil investigation parallel with the criminal one. The court does not frame this clash of policies the same way that I have, perhaps because it simply does not believe that TBOR plays a role here. In its conclusion on this issue it says:
Defendant has identified no authority supporting his theory that a violation of the Taxpayer Bill of Rights offends the Fifth Amendment. Defendant correctly notes that, in some instances, an “agency’s failure to follow its own regulations . . . may result in a denial of due process.” ECF No. 177 at PageID.4007 (citing Wilson v. Comm’r of Soc. Sec., 378 F.3d 541, 545 (6th Cir. 2004)). But no court in this circuit or any other circuit has ever held that the Service’s failure to comply with the Taxpayer Bill of Rights violates due process or otherwise warrants dismissal of the indictment. Indeed, the remedy that the Internal Revenue Code provides for violations of the Code and Treasury Regulation is a civil action for damages. See 26 U.S.C. § 7433(a). With similar reasoning, the Ninth Circuit previously declined to vacate a criminal conviction based on the Service’s violation of the Taxpayer Bill of Rights. See United States v. Bridges, 344 F.3d 1010, 1020 (9th Cir. 2003) (noting that the “Taxpayer Bill of Rights [does not] authorize the suppression of evidence or the reversal of a criminal conviction.”); accord United States v. Tabares, No. 115CR00277SCJJFK, 2016 WL 11258758, at *8 (N.D. Ga. June 3, 2016), report and recommendation adopted, No. 1:15-CR-0277-SCJ-JFK, 2017 WL 1944199 (N.D. Ga. May 10, 2017).
As you know from our prior discussions, TBOR has not been successfully used to make a dent in civil cases as of yet. It would be quite surprising if it plays much of a role in criminal cases but the failure here does not mean that the next defendant cannot find a different way to try to interject TBOR into the outcome of a criminal prosecution.