The Fourth Amendment in Criminal Tax & Evasion Mattes

Fourth Amendment Protects From Unreasonable Search in Tax Cases

In general, Taxpayers tend to keep important documents in their homes — even when those documents may, unfortunately, serve as a roadmap for the US Government to pursue tax criminal investigation — and implicate the Taxpayer in a criminal tax violation. When it comes to criminal tax investigations and just how far the IRS can go to search and seize documents, a key issue involves the fourth amendment protection against unreasonable search and seizure. In general, the US Government cannot just enter a home or office and begin searching and seizing records — unless the government agency has obtained a warrant — or certain (limited) exceptions to the warrant requirement are met. In other words, a warrant is not always required and sometimes the US Government can search and seize without a warrant — such as when consent is provided, it is incident to a lawful arrest or exigency combined with probable cause. In addition, if the items are out in public and/or an arresting officer’s view for example — a warrantless search may be valid. In the world of criminal tax evasion and home/office searches, it is a bit more complicated. Let’s review the basics of the Fourth Amendment Unreasonable Search & Seizure in Criminal Tax as it relates to a typical fact pattern or tax evasion:

Fourth Amendment

• • • The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.

Common Tax Crime Situation and the Fourth Amendment

The US Government conducts an investigation of the Taxpayers, And, after a diligent investigation, the IRS Special Agents believe a Taxpayer has committed Tax Evasion. The US Government also believes that the Taxpayer has documents in their home relating to the crime of Tax Evasion. The Taxpayer has not yet been charged with a crime and the Government wants to search and seize the property where Taxpayer resides. What are the Taxpayer’ protective rights under the fourth amendment and right against unreasonable search and seizure in their home?

A key case involving tax and unreasonable search and seizure is the supreme court case of  G.M. Leasing vs United States:

G.M. Leasing Corp. v. United States, 429 U.S. 338 (1977)

In G.M. Leasing, the IRS determined that Defendant (who was on the run) committed tax crimes and wanted to search the Taxpayer’s home. The IRS sought to levy Defendant’s property — but then expanded the search to include searching an office location on the property by making a warrantless search and entering the cottage. The District Court held it was an illegal search — but the court of appeals reversed nearly the entire ruling. There were multiple holdings, but as the fourth amendment, the court held: “The warrantless entry into the privacy of petitioner’s office violated the Fourth Amendment, since, “except in certain carefully defined classes of cases, a search of private property without proper consent is ‘unreasonable’ unless it has been authorized by a valid search warrant.”

Let’s review why the court ruled this way:

• • • The warrantless entry into the privacy of petitioner’s office violated the Fourth Amendment, since, “except in certain carefully defined classes of cases, a search of private property without proper consent is ‘unreasonable’ unless it has been authorized by a valid search warrant.” Camara v. Municipal Court, 387 U. S. 523, 387 U. S. 528-529. Pp. 429 U. S. 352-359.

      • (a) Business premises are protected by the Fourth Amendment, and corporations have Fourth Amendment rights. The intrusion here was based not on the nature of petitioner’s business, its license, or regulation of its activities, but on the ground that its assets were seizable to satisfy tax assessments, which does not justify depriving petitioner of its Fourth Amendment rights simply because it is a corporation. Pp. 429 U. S. 353-354.

      • (b) Neither the history of the common law and the laws in several States prior to the adoption of the Bill of Rights nor the case law since that time justifies creation of a broad exception to the warrant requirement for intrusions in furtherance of tax enforcement. Pp. 429 U. S. 354-356.

      • (c) Section 6331(b) must be read as authorizing only warrantless seizures, as opposed to warrantless searches. Pp. 429 U. S. 356-358.

      • (d) This case does not fall under the “exigent circumstances” exception to the warrant requirement, as is clear from the agents’ own delay in making the entry in which the records were seized. Pp. 429 U. S. 358-359.

Business Premises has Fourth Amendment Protections

• • • The respondents do not contend that business premises are not protected by the Fourth Amendment. Such a proposition could not be defended in light of this Court’s clear holdings to the contrary. See v. City of Seattle, 387 U. S. 541 (1967); Go-Bart Co. v. United States, 282 U. S. 344 (1931); Silverthorne Lumber Co. v. United States, 251 U. S. 385 (1920). Nor can it be claimed that corporations are without some Fourth Amendment rights. Go-Bart Co. v. United States, supra; Silverthorne Lumber Co. v. United States, supra; Oklahoma Press Pub. Co. v. Walling, 327 U. S. 186, 327 U. S. 205-206 (1946); Hale v. Henkel, 201 U. S. 43, 201 U. S. 75-76 (1906). Cf. California Bankers Assn. v. Shultz, 416 U. S. 21 (1974); Federal Trade Comm’n v. American Tobacco Co., 264 U. S. 298, 264 U. S. 305-306 (1924); Wilson v. United States, 221 U. S. 361, 221 U. S. 375-376 (1911); Consolidated Rendering Co. v. Vermont, 207 U. S. 541, 207 U. S. 553-554 (1908).

Court Declines Fourth Amendment “Broad Exception in Tax Matters”

• • • The respondents argue that there is a broad exception to the Fourth Amendment that allows warrantless intrusions into privacy in the furtherance of enforcement of the tax laws. We recognize that the “Power to lay and collect Taxes” is a specifically enunciated power of the Federal Government, Const., Art. I, § 8, cl. 1, and that the First Congress, which proposed the adoption of the Bill of Rights, also provided that certain taxes could be “levied by distress and sale of goods of the person or persons refusing or neglecting to pay.” Act of Mar. 3, 1791, c. 15, § 23, 1 Stat. 204.

    • This, however, relates to warrantless seizures, rather than to warrantless searches. It is one thing to seize without a warrant property resting in an open area or seizable by levy without an intrusion into privacy, and it is quite another thing to effect a warrantless seizure of property, even that owned by a corporation, situated on private premises to which access is not otherwise available for the seizing officer.

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