Reisman v. Caplin

LOCATION: Apartment

DECIDED BY: Warren Court (1962-1965)
LOWER COURT: United States Court of Appeals for the District of Columbia Circuit

CITATION: 375 US 440 (1964)
ARGUED: Dec 12, 1963
DECIDED: Jan 20, 1964

Facts of the case


Media for Reisman v. Caplin

Audio Transcription for Oral Argument - December 12, 1963 in Reisman v. Caplin

Earl Warren:

Number 119 Samuel Reisman et al., Petitioners, versus Honorable Mortimer M. Caplin et al.

Mr. Magee.

Warren E. Magee:

Mr. Chief Justice and Mr. Associate Justices, Your Honor I represent the petitioners in this particular case who are practitioners of law. Mr. Reisman is an attorney practicing law in Los Angeles, California.

The other plaintiffs in the suit below who are petitioners here are attorneys practicing in the District of Columbia and who specialize in the income tax and other tax fields and have practices outside of the District of Columbia.

The situation involved in this case rose in this fashion.

Two taxpayers by the name of Bromley were having tax problems with the Bureau.

As a result of certain negotiations and actions, deficiency assessments in the sum of several million dollars had been issued by the Bureau.

Ultimately, these assessments ended up in four cases to be adjudicated in the Tax Court.

At or about the time these cases were pending in the Tax Court, the firm in California Los Angeles retained the Washington firm to assist them in the defense of these tax cases and for any possible criminal litigation, if that ever arouse out of the so called tax delinquencies.

Potter Stewart:

The taxpayers are Californians, are they?

Warren E. Magee:

The taxpayers at that time are residents of Honolulu Your Honor and had as the subpoena show, had activities which extended throughout the world, according to the face of the subpoenas.

William O. Douglas:

What has happened to the tax litigation of which this suit rose?

Warren E. Magee:

It has been tried and we so stated in our brief Your Honor and it is now under consideration by the Tax Court, but the decision has not yet been rendered in any of the four cases.

William O. Douglas:

Is the, is the issue we decide today, we hear today relevant to anything that Tax Court (Inaudible)

Warren E. Magee:

Yes sir but not to the Tax Court, because those cases had been tried, but it is relevant because the commissioner has stated he is going ahead with these subpoenas anyway because there is a pending criminal investigation open in these cases, that's why it is not moot Your Honor, this is the dangerous aspect of it.

Now, here is what happened in this case.

The taxpayers endeavored to work out a settlement with the representatives of the respondent.

Tentative arrangements were made under which Peat, Marwick, and Mitchell, a vast accounting firm with offices throughout the world and throughout the United States were retained by Trammell, Rand, and Nathan, and by Reisman to aid them in preparing the defenses to the tax cases at any possible criminal implications that might be involved.

Discussions were entered into with the bureau and it was tentatively agreed that the various documents and papers which Trammell, Rand, and Reisman firm returned over to Peat, Marwick, and Mitchell for accounting purposes would be a sample, worksheets would be prepared and a certain disclosure would be made for settlement purposes with the bureau.

Only assurance that there was no criminal investigation pending.

Negotiations to this end went on and at a late conference just before Counsel were about to turn over their work products to the bureau, the bureau then notified that there was an open criminal case after the so called bailment had been made between Counsel and their accountants.

You must always bear in mind Your Honor that these accountants never worked for the taxpayers.

They were retained by counsel just as they retained anyone else to work in their office, such a law clerk, a bookkeeper, or any other person and the arrangement which is alleged in the compliant is that it was agreed that every piece of paper that went to Peat, Marwick, and Mitchell was to be isolated in a file and designated as the property of the plaintiff attorneys and not the property of the accountants.

Arthur J. Goldberg:


Warren E. Magee:

No he is not in the suit Your Honor.

Taxpayers are not parties to this litigation.

Their rights have been asserted through their counsel, Mr. Goldberg.

Arthur J. Goldberg:


Warren E. Magee:

Yes sir, yes sir.

I shall be delighted to.