APPEAL from the Circuit Court of Cook County; the Hon. JACK
ARNOLD WELFELD, Judge, presiding.
MR. JUSTICE HAYES DELIVERED THE OPINION OF THE COURT:
The State of Illinois appeals from an order suppressing evidence. The State proposed to introduce the evidence against defendant Jerome M. Myers (hereinafter Myers) at a trial pursuant to a complaint charging Myers with 12 counts of filing fraudulent Retailers' Occupation Tax Returns. (Ill. Rev. Stat. 1971, ch. 120, par. 452.) Myers' contention, upheld by the court below, is that the evidence in question was fatally tainted by the failure of both an auditor and an investigator from the Illinois Department of Revenue to advise him, prior to their interrogation of him at his place of business, of his constitutional rights under Miranda v. Arizona (1966), 384 U.S. 436, 16 L.Ed.2d 694, 86 S.Ct. 1602. At a hearing on defendant's motion to suppress evidence, held on 5 September 1973, the following testimony was given.
James Whitlock, an auditor with the Field Division of the Illinois Department of Revenue, testified that the Investigations Division of the Department requested that he audit the books and records of the defendant, who did business as Jerry's Food and Liquors in Chicago. Whitlock first attempted to perform this audit on 1 September 1972. At this time, Myers stated that all of his books and records were in the possession of his accountant. After unsuccessfully trying to obtain the records from Myers' accountant, Whitlock again called upon Myers at his place of business on the morning of 2 October 1972. At this time, Myers produced three Retailers' Occupation Tax returns. Myers declined to hand over additional records, stating that he would prefer the Department to issue an assessment against him. Whitlock then left, stating that a 20% civil penalty for fraud could be assessed and that he would consult with his superiors. Myers indicated that he would seek the advice of his lawyer. That afternoon, Whitlock again inquired whether Myers would present his records, whereupon Myers again declined. On 18 October 1972, Ahitlock returned to Myers' place of business with Jake Lynn, an investigator from the Department of Revenue. At no time did Whitlock advise Myers as to his rights under Miranda. Whitlock further testified that he never mentioned that criminal charges could be brought against Myers nor did he know that criminal proceedings were contemplated.
Jake Lynn, an investigator with the Investigations Division of the Illinois Department of Revenue, testified that his job was to investigate cases which might involve fraud against the revenue of the State of Illinois. Generally, such cases would entail criminal prosecution; occasionally, civil liability only would be involved. Lynn stated that the investigation of Myers arose from a survey of potential criminal violations of the revenue laws and that, ordinarily, about one in four of such survey inquiries led to actual prosecution for alleged criminal violations. On 18 October 1972, Lynn accompanied Whitlock to Myers' place of business for the purpose of assisting Whitlock in obtaining Myers' records. Although Lynn informed Myers that he was an investigator with the Department of Revenue, he did not advise Myers of his rights under Miranda, nor that Lynn's area of interest was primarily criminal violations. Lynn did not warn Myers that failure to turn over books and records was a misdemeanor. In the course of Myers' conversation with Lynn and Whitlock on 18 October 1972, Myers made several potentially incriminating statements and revealed where he banked.
Myers had not been arrested by either Whitlock or Lynn on any occasion nor was he ever in their custody during the course of the foregoing conversations. Ultimately, the State subpoenaed Myers' banking records. Thereafter a 12-count complaint was filed against Myers on 29 March 1973. On 9 August 1973, the defendant moved to suppress all evidence obtained by the State as a result of the three conversations in October of 1972. After a hearing on the motion held on 5 September 1973, the court below on 14 September 1973 entered an order suppressing the evidence, finding that United States v. Dickerson (7th Cir. 1969), 413 F.2d 1111, and United States v. Turzynski (N.D. Ill. 1967), 268 F. Supp. 847, controlled; that Investigator Lynn interviewed the defendant to determine whether he was subject to criminal liability; and that, since Miranda warnings were not given to the defendant, all oral statements made by the defendant in the course of his October, 1972, interviews and all records obtained from the defendant's bank were obtained illegally.
Myers does not contend that his statements were in any way coerced. The State timely filed its Notice of Appeal pursuant to Supreme Court Rule 604(a)(1).
The sole issue presented for review before this court is whether Myers was entitled to a warning of his constitutional rights at the time Department of Revenue Agents interrogated him in October of 1972.
A highly analogous situation has been the subject of much litigation at the Federal level. Under procedures followed by the Federal Internal Revenue Service, Revenue Agents routinely audit many taxpayers' Federal income tax returns. The Revenue Agent, much like Agent Whitlock in the present case, is concerned with the civil liability of the taxpayer. If, however, criminal wrongdoing is suspected, the Revenue Agent may refer the taxpayer's case to a Special Agent from the Intelligence Division of the Internal Revenue Service. The Special Agent, much like Agent Lynn in the present case, is concerned primarily with the criminal liability of the taxpayer.
Under Internal Revenue Service procedures, the Special Agent from the Intelligence Division is required, when he interrogates the taxpayer, to advise the taxpayer of the Agent's position and function as well as to warn the taxpayer that he has the right against self-incrimination, the right to assistance of counsel before he responds, and that anything he says or any information he submits may be used against him. I.R.S. News Releases I.R.-897, I.R.-949, 1975 CCH Stand. Fed. Tax Rptr. R5709. 1148 (hereinafter referred to as "modified Miranda warnings".)
Under the investigatory procedures used by the Illinois Department of Revenue, Myers was not required to be given any warnings whatsoever, nor to be advised as to Agent Lynn's function or as to the nature of his inquiry.
The present case is one of first impression in the State courts of Illinois. On the Federal level, every circuit court of appeals, except the Seventh and arguably the Tenth, has held that Miranda warnings need not be given to a taxpayer being interrogated under criminal investigation by a Special Agent where the taxpayer is not in the custody of the Internal Revenue Agent or of some other authority and where he has not otherwise been deprived of his freedom of action in any significant way. Taglianetti v. United States (1st Cir. 1968), 398 F.2d 558, aff'd on other grounds, 394 U.S. 316, 22 L.Ed.2d 302, 89 S.Ct. 1099; Spinney v. United States (1st Cir. 1967), 385 F.2d 908, cert. denied, 390 U.S. 921, 19 L.Ed.2d 981, 88 S.Ct. 854; United States v. Mackiewicz (2d Cir. 1968), 401 F.2d 219, cert. denied, 393 U.S. 923, 21 L.Ed.2d 258, 89 S.Ct. 253; United States v. White (2d Cir. 1969), 417 F.2d 89; United States v. Jaskiewicz (3d Cir. 1970), 433 F.2d 415, cert. denied, 400 U.S. 1021, 27 L.Ed.2d 632, 91 S.Ct. 582; United States v. Browney (4th Cir. 1970), 421 F.2d 48; United States v. Bagdasian (4th Cir. 1968), 398 F.2d 971; United States v. Dawson (5th Cir. 1973), 486 F.2d 1326; United States v. Prudden (5th Cir. 1970), 424 F.2d 1021, cert. denied, 400 U.S. 831, 27 L.Ed.2d 62, 91 S.Ct. 62; United States v. Stribling (6th Cir. 1971), 437 F.2d 765, cert. denied, 402 U.S. 973, 29 L.Ed.2d 137, 91 S.Ct. 1661; United States v. Maius (6th Cir. 1967), 378 F.2d 716, cert. denied, 389 U.S. 905, 19 L.Ed.2d 219, 88 S.Ct. 218; United States v. MacLeod (8th Cir. 1971), 436 F.2d 947, cert. denied, 402 U.S. 990, 29 L.Ed.2d 157, 91 S.Ct. 1659; Cohen v. United States (8th Cir. 1968), 405 F.2d 34; United States v. Robson (9th Cir. 1973), 477 F.2d 13; Kohatsu v. United States (9th Cir. 1965), 351 F.2d 898, cert. denied, 384 U.S. 1011, 16 L.Ed.2d 1017, 86 S.Ct. 1915; Hensley v. United States (10th Cir. 1968), 406 F.2d 481 (dictum), but see United States v. Lockyer (10th Cir. 1971), 448 F.2d 417, 422 (dictum); United States v. Beckwith (D.C. Cir. 1975), 510 F.2d 741, cert. granted, 422 U.S. 1006, 45 L.Ed.2d 668, 95 S.Ct. 2627.
To the contrary are United States v. Oliver (7th Cir. 1974), 505 F.2d 301, and United States v. Dickerson (7th Cir. 1969), 413 F.2d 1111, which held that full Miranda warnings must be given by the Intelligence Division agent of the Internal Revenue Service on the occasion of his first contact with the taxpayer.
A compromise position had been taken by a district court in the Tenth Circuit. United States v. Wohler (D. Utah 1973), 382 F. Supp. 229, held that, while full Miranda warnings were not required to be given to a taxpayer under criminal investigation but not in physical custody, fundamental fairness required that the modified Miranda warnings set forth in the Internal Revenue Service news releases be given in such cases.
In light of the Supreme Court's grant of certiorari in Beckwith, we have deferred issuing our opinion until now. Beckwith v. United States, 44 L.W. 4499 (#74-1243 decided 4/21/76), compels us to reverse the order ...