In United States v. Gendreau (SDNY DKT 12 Misc 303 1/22/14), here, Judge Pauley again rejected the taxpayer's claim of privilege for foreign account documents. The compulsory process in question was an IRS Summons for her BSA required records of her foreign financial accounts. (By way of background, five Circuit Courts of Appeals, including the Second Circuit covering SDNY, have rejected the privilege claims made in the context of a grand jury subpoena; this Fifth Amendment claim is in the context of an IRS summons, but I don't think the type of compulsory process matters.)
I have reviewed the opinion very briefly. I don't think it adds much to the general consensus -- and unanimity in the courts of appeals -- that the Fifth Amendment is not a basis for avoiding compelled production of BSA required records.
The context of this opinion [enhanced version available to lexis.com subscribers] is that, on January 25, 2013 Judge Pauley ordered production of the BSA required records on the basis that the required records doctrine trumped Fifth Amendment claims. In response to that order:
Gendreau produced 976 pages to the IRS. But 477 of those pages were documents that the summons specifically stated it was not seeking because the IRS had obtained them by other means. Moreover, Gendreau produced documents responsive to only 6 of the Government's 32 document requests…..
Judge Pauley then addressed the foregone conclusion exception to the Fifth Amendment privilege [enhanced version available to lexis.com subscribers]. Of course, readers -- at least attentive readers -- of this blog will know that the foregone conclusion exception is a separate exception to the Fifth Amendment privilege. If the Government properly invokes the required records doctrine, the foregone conclusion exception is not relevant. As to any documents to which the required records exception does not apply, then the foregone conclusion exception is required to avoid the taxpayer's assertion of the Fifth Amendment privilege via the Act of Production doctrine.
Here is the Foregone Conclusion discussion:
IV. Foregone Conclusion Exception
The act of production is not privileged under the Fifth Amendment when "[t]he existence and location of the papers are a foregone conclusion and the taxpayer adds little or nothing to the sum total of the Government's information by conceding that he in fact has the papers." Fisher v. United States, 425 U.S. 391, 411 (1976) [enhanced version available to lexis.com subscribers]…..
View Jack Townsend's opinion in its entirety on the Federal Tax Crimes blog site.
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