After the first encounter (an interview) in which IRS CI's standard noncustodial warnings were given, an IRS CI Special Agent issued a summons. The second encounter was by texting between Patterson and the Agent about her appearance at the time and place designated in the summons. Patterson said she could not. The agent then texted
I can authorize one extension on the summons but I need to remind you that the summons is a legal document. Please read the section entitled Enforcement of Summons. Failure to appear will result in an attachment and arrest. Since you’ve been fully cooperative, I don’t want that to happen.They then agreed upon a rescheduling of the summons appearance.
The third encounter was Patterson's appearance as rescheduled pursuant to the summons. The third encounter is described as follows (Slip Op. 8-9, footnotes omitted):
The IRS Summons ordered Patterson to appear at the F. Edward Hebert Federal Building, room 1037. Once she arrived at the Hebert Building, she walked through metal detectors and past security officers to get to room 1037. She did not bring the nameless lawyer she had referred to in her communications with Agent Nuss; instead, she came alone. At the IRS’s office she met with Agent Nuss and she was introduced to Special Agent Cary Davis. The Special Agents were not in uniform, but Davis provided her badge and credentials for Patterson’s inspection. Unlike when Special Agents Boyles and Nuss had interviewed her at her mother’s home, this time the agents did not read Patterson the statement of non-custodial rights, despite the Internal Revenue Manual’s admonition that they do so. It appears that the agents did not advise Patterson of any of her rights; they did not tell her she could terminate the interview or that she could leave at her discretion. The interview took place in a conference room and began at 3:19 p.m.
According to the IRS memorandum, the agents began the interview by giving Patterson a spreadsheet entitled “2012 Returns Deposited to Crown Bank Account,” which Patterson had previously reviewed. The agents asked her to identify the customers she had referred to Butler; she did so. Then, the agents gave Patterson client folders for tax year 2012 which had been summoned from Butler; Patterson proceeded to identify the false items in returns prepared by Butler and her former co-worker, Dana Alvarez. The agents then gave Patterson print-outs of transmitted returns that Patterson had prepared for her No Limit Tax Refund business in 2014 for tax year 2013 and asked her to identify false items. Patterson reviewed the print outs and identified approximately fifty-three false items in thirty-one returns she had prepared. She was asked to do the same with tax returns she had prepared for tax year 2014, both for her own company and for Pelican Income Tax, and she identified many more false items in tax returns she had prepared. The interview lasted until 7:07 p.m.33 Patterson was not arrested at the conclusion of the interview and was allowed to leave.The issue with respect to all of the communicative encounters was whether they were in a custodial setting. A custodial setting requiring full-blown Miranda warnings is usually obvious, but can also exist in other settings. As explained by the court (Slip Op. p. 14)
Only the third interview was a custodial setting. The Court thought (Slip Op. pp 23-24) that an interview pursuant to a summons alone might be sufficiently coercive making it custodial so that Miranda warnings would be required. (Note these would be full Miranda warnings and not just modified noncustodial Miranda warnings that the IRS gives.) However, the court felt it was constrained from adopting a per se rule by Minnesota v. Murphy, 465 U.S. 420 (1984). The issue rather was whether, under all the circumstances, Patterson was in custody during the interview.
It bears repeating what the actual test for custody is in these circumstances. As formulated by the Supreme Court in Thompson v. Keohane, 516 U.S. 99 (1995), the inquiry is, given consideration of the circumstances surrounding the interrogation, whether “a reasonable person [would[ have felt he or she was not at liberty to terminate the interrogation and leave.” 516 U.S. at 112 (internal quotation marks and footnote omitted). Once the court has reconstructed the scene from the facts, the test becomes an objective determination of whether the person interrogated was restrained to a level similar to that of a formal arrest. Id. Examining the facts the Court has described above through an objective lens, the Court concludes the May 28 interrogation was non-custodial.
Here is the court's discussion of that issue (Slip Op. 27-32, some footnotes omitted):
Patterson’s appearance at the IRS’s office on June 16 was obviously not voluntary. Agent Nuss explicitly informed Patterson the week before that if she did not attend she would be arrested. When Patterson missed her first summons date, he texted her on June 10, 2015:
I can authorize one extension on the summons but I need to remind you that the summons is a legal document. Please read the section entitled Enforcement of Summons. Failure to appear will result in an attachment and arrest. Since you’ve been fully cooperative, I don’t want that to happen.
The IRS Summons Form 2039 is a simple document. Its command to the summoned individual is as follows:
You are hereby summoned and required to appear before Special Agent Mark Nuss or his delegate[,] an officer of the Internal Revenue Service, to give testimony and to bring with you and to produce for examination the following books, records, papers, and other data relating to the tax liability or the collection of tax liability or for the purpose of inquiring into any offense connected with the administration or enforcement of the internal revenue laws concerning [Brittany Patterson and/or No Limit Tax Refunds] for the periods shown.
Attached to the summons is a list of the materials to be produced by Patterson and a form listing relevant provisions of the Internal Revenue Code. Appearing at the bottom of this form is the “failure to obey summons” section Agent Nuss was referring to, section 7210 of the Internal Revenue Code. It states:
Any person who, being duly summoned to appear to testify, or to appear and produce books, accounts, records, memoranda, or other papers, as required under sections 6420(e)(2), 6421(g)(2), 6427(j)(2), 7602, 7603, and 7604(b), neglects to appear or to produce such books, accounts, records, memoranda, or other papers, shall, upon conviction thereof, be fined not more than $1,000, or imprisoned not more than 1 year, or both, together with costs of prosecution.
26 U.S.C. § 7210. Given this, Patterson cannot be said to have appeared voluntarily at the IRS’s office, and the typical justification for holding IRS interrogations to be non-custodial is absent in this case.
Additionally, other ameliorative circumstances, generally present in typical IRS interrogations, were also absent in this case. Patterson was interrogated by federal agents until after seven in the evening on what is definitely the “Government’s turf.” n43 The length of the interrogation—over four hours—is, at the least, suggestive of custody. C.f. United States. v. McNair, 444 Fed. Appx. 769, 770 (5th Cir. 2011) (per curiam) (unpublished) (finding a less than two-hour interrogation not to be custodial per se). The June 16 interrogation was actually shorter than the May 28 interrogation the Court already found to be non-custodial, but duration should not be examined alone to determine custody. There were other factors present for the May 28 interrogation which suggested that although the interrogation went on for very substantial amount of time, it went on for that length because Patterson was content to keep talking. On that earlier date Patterson was interrogated at her mother’s home, with her mother mostly seated only a few feet away, and it was Patterson’s choice to meet with the agents and invite them inside. In stark contrast, on June 16 Patterson was interrogated in the IRS’s office by the two Special Agents while she was alone. She did not appear of her own volition, she was compelled to appear by the IRS Summons. In fact, she was informed by the very IRS Special Agent who interviewed her that if she did not show up to give testimony, she would be arrested.
n43 The General Services Administration describes the location of the interview, the F. Edward Federal Building, as “a large, modernistic, eleven-story limestone structure of approximately 244,000 square feet, constructed in 1939.” General Services Administration, F. Edward Hebert Federal Building, New Orleans, LA, https://www.gsa.gov/historic-buildings/f-edward-hebert-federal-building-new-orleans-la (last visited May 30, 2019). As GSA notes, its design is typical of the austere Art Deco style that was popular for government buildings in the 1930s. Id. The building remains a “symbol of federal presence in New Orleans.” Id. In other words, while the interview may not have taken place in the station house, it was conducted in a location designed with the intent to project federal power. It is a far cry from a neutral location.
Furthermore, on May 28 the agents informed Patterson of her non-custodial rights. On June 16 the agents did not read Patterson the statement of non-custodial rights before conducting the formal interview—in contravention of the Internal Revenue Manual; nor does it appear that the agents informed Patterson she could refuse to answer questions or that she could leave at will. The agents’ decision to alert Patterson to her Fifth Amendment rights before one interview and not before the other is especially problematic in this case. As explained, the circumstances of the May 28 and June 16 interviews are entirely different—most notably the second interrogation was brought about by an IRS Summons compelling Patterson to appear to testify before the agents. A reasonable person might misunderstand that her right against self-incrimination was eliminated by the intervening IRS Summons; this belief would be reinforced by the Special Agents reading Patterson a statement of non-custodial rights on May 28 but not on June 16.
Finally, a reasonable person would understand they were a target of the IRS’s criminal investigation after reading the IRS’s Summons and Special Agent Nuss’s text message, warning of arrest, as Patterson herself came to realize on June 10. The IRS Summons explicitly narrowed the subject of the documents to be brought, and her testimony to be elicited, to Patterson and her own tax preparation company, not the other enterprises Patterson had merely worked for. During the actual interrogation the agents asked Patterson to identify the false items on returns she had helped prepare. Under these circumstances, no reasonable person, having been compelled to appear and being confronted with a stack of false returns they had prepared—now fully understanding they were a target of the IRS’s criminal investigation—would have felt they were at liberty to terminate the interview and walk away. n45
n45 The case Government relies upon, Oregon v. Mathiason, 429 U.S. 492 (1977) (per curiam), is distinguishable. In Mathiason an officer of the state police investigating a burglary left his card at the home of a suspect, Mathiason, and a note asking the defendant to call him because “I’d like to discuss something with you.” Id. at 493. Mathiason was a parolee at the time. The defendant called, and the officer asked that they meet at a place convenient to the defendant; the defendant did not have a preference where they met so they met at the state police’s patrol office, two blocks from Mathiason’s home. The officer met with the Defendant and took him into an office before closing the door. The officer interviewed Mathiason from behind a desk. Before asking any questions, the officer assured the defendant he was not under arrest. The officer informed Mathiason he was a suspect in the burglary and falsely told him that they had found Mathiason’s fingerprints at the scene. Five minutes into their conversation Mathiason confessed. The officer advised Mathiason of his Miranda rights, they taped a confession, and Mathiason was released—the officer said the DA would make a decision of whether to press charges. Id. at 494. All of this took less than thirty minutes. The Supreme Court found Mathiason was never in custody because the “respondent’s freedom to depart was never restricted in any way.” Id. at 495. First, Mathiason came to the interview voluntarily; second, he was immediately informed he was not under arrest; third, questioning took only half an hour; fourth, he was in fact allowed to leave after its conclusion. Id. Of these four reasons for finding no custody, three out of four are absent from this case. Patterson did not come voluntarily, she was compelled to on threat of arrest; she was never informed she was not under arrest or that she was free to terminate the interview whenever she wanted; and the interview proceeded for four hours.
Having found a reasonable person would not have felt free to leave, the only thing that remains to be decided is whether this is one of those circumstances where the Miranda court did not anticipate the prophylactic rule would be applied; situations such as: brief investigatory detentions, Berkemer v. McCarty, 468 U.S. at 430; interrogations of prisoners, Howes v. Fields, 565 U.S. at 511; or the appearances of witnesses before grand juries or in court, United States v. Mandujano, 425 U.S. at 579. Patterson’s detention was far from brief and she was not accustomed to “inherently compelling pressures” as a prisoner would be, but the Court has already acknowledged that an IRS Summons resembles a grand jury appearance in some regards. Nevertheless, when placed on a continuum of cases where the prototypical stationhouse interview is on one end and subpoenaed witness testimony in a court room is on the other, the June 16 interrogation is much closer to the former than the latter. The Supreme Court commented on the “marked contrasts between a grand jury investigation and custodial interrogation” in Mandujano, 425 U.S. at 580. A plurality of the Court found it would obviously have been a significant extension of Miranda to hold that its rule required a warning prior to “questioning before a grand jury inquiring into criminal activity under the guidance of a judge.” Mandujano, 425 U.S. at 580. As the Court acknowledged in the Miranda opinion, “the compulsion to speak in the isolated setting of the police station may well be greater than in courts or other official investigations, where there are often impartial observers to guard against intimidation or trickery.” Miranda, 384 U.S. at 461.
Here, an official compulsion to testify was simply overlaid on the typical interrogation setting. There were no impartial observers and no courtroom setting. Rather, criminal investigators summoned a target of their investigation, whom they had already interviewed extensively and had amassed evidence against through a sting operation, so they could question her as to her own criminal conduct. There has been no hint that this is a situation which the Court did not intend for Miranda to apply. See Beckwith, 425 U.S. at 347.
Accordingly, upon consideration of the totality the circumstances, the Court finds Patterson was subjected to a custodial interrogation on June 16, 2019 without being read her Miranda rights, and the statements made during this interrogation should be suppressed.JAT Comments:
1. The opinion is, I think, quite a good development of the facts and analysis of the law.
2. It seems to me to be incredible that the Agents would not have given the standard noncustodial Miranda warnings.
3. It would seem that, from an abundance of caution, IRS CI might want to give full custodial Miranda warnings when the interview is in the IRS's offices pursuant to summons.
4. The Court's citation of § 7210 is interesting. Prosecutions under § 7210 are rare. See Michael Saltzman and Leslie Book, IRS Practice and Procedure (Thomsen Reuters 2015) (online edition), ¶ 12.02[8] Miscellaneous Other Internal Revenue Code Offenses.
n221 This provision is rarely used. Rather, if the government desires sanctions, it will seek judicial enforcement of the summons, where if it proves entitlement to enforce, the district court will order compliance and then upon failure to comply with the district court's order, the district court will hold the non-complying witness in contempt and sanction under its contempt authority. That is the usual procedure. Whether or not the government could prosecute for the original failure to comply with the summons may be an open issue. Schulz v. IRS, 395 F3d 463 (2d Cir. 2005), clarified 413 F3d 297 (2005). In any event, the government does not prosecute these cases. The crime is not mentioned in the CTM and no jury instructions are provided.I am the principal author of that chapter, so in effect, I am citing myself. I do note that the DOJ CTM does provide a form of indictment for § 7210. See Form 49, DOJ Tax CTM, here. In Reisman v. Caplin, 375 U.S. 440, 447 n. 6 (1964), the Court said: "The only prosecution under § 7210 is United States v. Becker, 259 F. 2d 869." It is not unusual for courts to cite the provision, but not for purposes of actually applying it. E.g. Marinello v. United States, ___ U.S. ___, ___ 138 S. Ct. 1101, 1112 (2018). I strongly urge those interested in the issue to read particularly the Second Circuit's clarification in Schulz, 413 F3d 297 (2005).
5. The issue will be, of course, whether the Government can meet its burden without the excluded evidence and fruits of the excluded evidence. I assume that there could be a Kastigar-type hearing to ensure that the Government does not use the evidence or fruits of the evidence.
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