This appears to be a valid and legitimate objection. Betts
might be precluded from asserting the accountant-client
privilege under Illinois law if IRS agents were to "share" the
privileged information with state agents. The court has been
unable to locate, and the government has not supplied, any
authority which would indicate that disclosure to state
officials would be limited to avoid this problem. For this
reason, the objection to enforcement of the summons in 80 C
5722 shall be upheld, and enforcement denied.
The summonses in question seek information regarding the
financial transactions of Curtis and Willia Betts. The
government has stated that the current investigation is
directed to the potential tax liability of Curtis Betts.
Intervenors argue that the summonses, if enforced, should be
limited to the papers regarding Curtis Betts. The court agrees.
The government has not alleged or shown that Curtis and Willia
Betts have filed joint returns, or otherwise indicated why
Willia Betts should be investigated. Although the government's
burden in summons enforcement is minimal, it is not totally
The court has examined the discovery requests filed by
intervenors. Discovery may be limited in summons enforcement
actions. In the present case, the discovery seeks all
information regarding basis and background of the IRS
investigation, as well as all information in the IRS possession
which would lead them to believe the summonses are necessary.
It is apparent that the discovery requests currently on file
are not directed to those limited areas where challenge would
be proper. Therefore, the requests for discovery will be
For the reasons stated, the objections to enforcement, except
as to papers concerning Willia Betts alone and the summons
directed to Caplan, Schwartz, Taub & Levin, 80 C 5722, shall
be, and the same are hereby overruled, and enforcement ordered.
The petition for enforcement of the summons directed to Caplan,
Schwartz, Taub & Levin, 80 C 5722, shall be and the same is
hereby denied. Intervenors' motion for discovery shall be
denied, and the discovery requests quashed. It is so ordered.
ON MOTION TO MODIFY
This cause is before the court on the unopposed motion of the
United States to modify the May 14, 1981, order granting
enforcement of IRS summons with two exceptions. For the reasons
hereinafter stated, the motion will be granted, and enforcement
of the remaining summons will be directed.
The May 14, 1981, order directed enforcement of eleven IRS
summons. The court, however, directed that to the extent the
summons sought papers relating to Willia Betts, spouse of the
taxpayer under investigation, the summonses should not be
enforced. The court further found the summons directed to the
accountant should not be enforced on the grounds that
enforcement through information-sharing between state and
federal officials might indirectly infringe on the state law
The IRS has now provided the court with information that Curtis
and Willia Betts filed joint income tax returns for the years
in question. Under these circumstances, it is clear the papers
relating to Willia Betts may be relevant to the ongoing
investigation. 26 U.S.C. § 7602.
As the IRS points out, the accountant-client privilege is not
recognized as a matter of federal law, nor has a state-created
privilege been recognized in federal court. Couch v. United
States, 409 U.S. 332, 335, 93 S.Ct. 611, 619, 34 L.Ed.2d 548
(1973). While information-sharing between state and federal
officials might later be of concern, it appears this should not
preclude enforcement of the IRS summons at this time.
Therefore, the determination denying enforcement to the summons
directed to Caplan, Schwartz, Taub, & Levin shall be vacated,
and enforcement ordered.