Topic: DUE PROCESS
Due Process in IRS Criminal Investigations
IRS special agents in the CI division of the IRS are governed by rules of process, rules of conduct, and rules of law that guide their behavior, in turn entitling individuals to certain protections against the abuse of process that may occur in an IRS criminal investigation.
As one of our most honored jurists of our highest court opined, Justice Frankurter, speaking for the Court in McNabb v. United States, 318 U.S. 332, 343 (1943): “A democratic society in which respect for the dignity of all men is central, naturally guards against the misuse of the law enforcement process.” Whenever any agency would either gain advantage from the selective un-‐enforcement of its procedures, have a disincentive to discipline the transgressing employee (from its prosecutorial profits), or whenever a formal directive was deliberately communicated to the public for its potential reliance, or whenever the directive was designed to protect taxpayers by setting a clear or uniform standard governing contact between Special Agents and the public, then failure to adhere to those rules and procedures, even if otherwise internal, would violate due process rights of the affected individual. See United States v. E. Leahey, 434 F.2d 7 (1st Cir. 1970); see also United States v. Heffner, 420 F.2d 809, 812 (4th Cir. 1969); see also Internal Revenue Manual 18.104.22.168.3.1 (05-‐15-‐2008) (recognizing continued enforcement of these precedents to IRS rules enforcement under due process principles).
Indeed, “agencies will be compelled to adhere to the standards of behavior that they have formally and purposely adopted in light of the requirements of the Constitution, even though these standards may go somewhat further than the Constitution requires.” United States v. E. Leahey, 434 F.2d 7 (1st Cir. 1970). In fact, “due process requires the I.R.S. to follow its announced procedures.” United States v. E. Leahey, 434 F.2d 7 (1st Cir. 1970). “When an agency goes public it does not do so lightly. Its obligations increase just as do those of a private corporation. This must be so since inquiry of personal, subjective knowledge of a person affected by a procedural dereliction is no more practicable than in the securities field. There is no way of assuring that, once the public announcement has been made, some alter taxpayers or their lawyers have not relied on it.” United States v. E. Leahey, 434 F.2d 7 (1st Cir. 1970).
After all, “the objective of uniform conduct by all Agents…is an objective shared by the Service, the public and the courts.” United States v. E. Leahey, 434 F.2d 7 (1st Cir. 1970). Sage public policy compels the same, including due process civil rights claims, suppression rights, and the dismissal of indictments, in order to effectively and efficaciously enforce such rules and restrictions on IRS agent conduct as the critical deterrent in establishing confidence in the integrity of the criminal process. "The I.R.S. has no great incentive to scrutinize carefully the conduct of interviews by its Agents, if the conduct does not affect the result of the prosecution. Indeed, an Agent’s violation of these procedures in selective cases may benefit the agency.
More important, citizens’ faith in even-‐handed administration of laws would be eroded – just as much as if a municipality applied an ordinance only to a selected group.” Leahey. This is nothing new. Even the law enforcement inclined Fourth Circuit concurred, noting any “agency of the government must scrupulously observe rules, regulations or procedures which it has established. When it fails to do so, its action cannot stand and courts will strike it down.” United States v. Heffner, 420 F.2d 809, 812 (4th Cir. 1969). “It is of no significance that the procedures or instructions which the IRS has established are more generous than the Constitution requires.” United States v. Heffner, 420 F.2d 809, 812 (4th Cir. 1969). “Nor does it matter that these IRS instructions to Special Agents were not promulgated in something formally labeled a regulation or adopted with strict regard to the Administrative Procedure Act.” United States v. Heffner, 420 F.2d 809, 812 (4th Cir. 1969). This doctrine “furthermore requires reversal irrespective of whether a new trial will produce the same verdict.” United States v. Heffner, 420 F.2d 809, 813 (4th Cir. 1969).
The IRS itself recognizes the vitality of this four-‐decade-‐ established doctrine, reciting both decisions in the creation of its rules and regulations as reasons for these very rules and regulations, without restriction. See Internal Revenue Manual 22.214.171.124.3.1 (4) (05-‐15-‐2008). This law merely reinforces what the Supreme Court continually held commencing in Mathis v. United States, 391 U.S. 1 (1968). This simply conforms to the entire purpose of the use of the criminal process, investigatory methods of criminal inquiry, and prosecutorial decisions throughout the Service and the Department.