On The Front Lines
Rutherford Institute Asks Supreme Court to Rein in the IRS' Unconstitutional Power Grabs, Warrantless Searches of Innocent Taxpayers’ Bank Accounts
WASHINGTON, DC — Warning against unconstitutional power grabs and overreaches by the IRS, The Rutherford Institute has asked the U.S. Supreme Court to restrict the tax agency’s authority to carry out warrantless searches of innocent taxpayers’ bank accounts and financial records as part of its efforts to identify and pursue the funds of associated family members and friends with delinquent taxes.
In an amicus brief filed with the Supreme Court in Polselli v. IRS, The Rutherford Institute and Cato Institute argue that the sweeping investigatory power wielded by the IRS—to circumvent the Fourth Amendment by carrying out warrantless searches of the bank accounts and records of innocent people merely because they may be associated with a delinquent taxpayer—offends every constitutional sensibility on the right to privacy.
“The Supreme Court needs to rein in the IRS’ unconstitutional power grabs,” said constitutional attorney John W. Whitehead, president of The Rutherford Institute and author of Battlefield America: The War on the American People. “This practice of investigating the bank records of innocent taxpayers because they may have family members or associates who are delinquent on their taxes is merely a perverse form of guilt by association. At a minimum, Fourth Amendment protections should not disappear just because sensitive information is shared with third parties, such as banks and attorneys.”
The case arose after an IRS Revenue Officer, seeking to collect underpaid federal taxes by Remo Polselli, served summonses on the banks of Polselli’s wife and attorney in order to find account and financial records concerning Polselli. The IRS agent did not notify Polselli’s wife or attorney of the summonses, but the banks voluntarily did so. Polselli’s wife and attorney subsequently filed motions in federal district court to quash the IRS’s summonses. In siding with the IRS, the district court held that Polselli’s wife and attorney are not entitled to notice of the summons and have no right to even be heard on their motions to quash the summonses. The Sixth Circuit Court of Appeals agreed and, not wanting to “significantly impede the IRS’s ‘expansive information-gathering authority,’” interpreted a federal statute to rule that the IRS may summon the recordkeeper of any person without notice to that person if the summons was issued in aid of the collection of an assessment against a delinquent taxpayer. Although the Sixth Circuit acknowledged that the IRS may be able to access information regarding blameless third parties, which could then be shared with the Department of Justice for a criminal prosecution, the court brushed aside such concerns as “conjectural fears.”
In support of the appeals by Polselli’s wife and attorney to the Supreme Court, attorneys for The Rutherford Institute and Cato argued that the statute should be interpreted consistent with the Fourth Amendment’s privacy values and protections against unreasonable searches so that the IRS cannot sweep up sensitive information of innocent people who coincidentally happen to have the same employer, lawyer, or accountant as a delinquent taxpayer.
Ethan H. Townsend, Michael B. Kimberly, and Emmett A. Witkovsky-Eldred of McDermott Will & Emery LLP advanced the arguments in the amicus brief in Polselli v. Internal Revenue Service.
The Rutherford Institute, a nonprofit civil liberties organization, defends individuals whose constitutional rights have been threatened or violated and educates the public on a wide spectrum of issues affecting their freedoms.