United States v. LaSalle National Bank

PETITIONER:United States
RESPONDENT:LaSalle National Bank
LOCATION:Association of Motion Picture and Television Producers

DOCKET NO.: 77-365
DECIDED BY: Burger Court (1975-1981)
LOWER COURT: United States Court of Appeals for the Seventh Circuit

CITATION: 437 US 298 (1978)
ARGUED: Mar 29, 1978
DECIDED: Jun 19, 1978

Lawrence G. Wallace – argued the cause for the United States et al
Matt P. Cushner – for respondents

Facts of the case


Media for United States v. LaSalle National Bank

Audio Transcription for Oral Argument – March 29, 1978 in United States v. LaSalle National Bank

Audio Transcription for Opinion Announcement – June 19, 1978 in United States v. LaSalle National Bank

Harry A. Blackmun:

The second case United States against the Lasalle National Bank comes to us by certiorari to the United States Court of Appeals for the Seventh Circuit.

And it relates to the issuance of Internal Revenue Service summonses.

A special agent in the process of investigating a tax payer’s tax liability issued summonses to the Lasalle National bank of Chicago under section 7602 of the Internal Revenue Code of 1954.

Specifically the summonses ask the bank to appear before the agent and to produce files of certain land trust that the bank held for the tax payer.

The bank official appeared but he refused to produce the files, the United States in the agent and then petitioned the District Court for enforcement of those summonses.

The court denied enforcement, and it specifically found that the summonses were not issued in good faith because they were issued by the agent solely for the purpose of unearthing evidence of criminal conduct by the taxpayer, and the Seventh Circuit affirmed.

In an opinion filed a day we hold that the court’s below erred in refusing to enforce the summonses.

Congress has not categorized tax fraud investigation into civil and criminal components instead it has created a tax enforcement system in which criminal and civil elements are inherently intertwined.

To enforce a summons under 7602, it definitely of course must be issued before the service recommends to the Department of Justice that a criminal prosecution relating to the subject matter of the summons be undertaken.

Prior to that recommendation however, the service may use its summons authority in good faith and not abandoned its institutional responsibility to collect civil fraud penalties and fraudulently reported or unreported taxes.

Since there was no recommendation as yet to the justice department for criminal prosecution when these summonses were issued and absent any showing that the special agent already possessed all the evidence sought without the service in an institutional sense had abandoned pursuit of the taxpayer’s civil tax liability.

The respondents have not shown sufficient justification to preclude enforcement of the summonses in question.

The judgment of the Court of Appeals accordingly is reversed and the case is remanded for further proceedings consistent with this opinion.

I am authorized to say that Mr. Justice Stewart has filed a dissenting opinion which I believe concurs at least in the judgment of reversal but he is joined in that opinion by the Chief Justice, Mr. Justice Rehnquist and Mr. Justice Stevens.

Warren E. Burger:

Thank you Mr. Justice Blackmun.