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 2010-08

Steven Sears v. United States , 392 F. App'x 605 ( 2010 )


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  •                                                                            FILED
NOT FOR PUBLICATION                          AUG 24 2010
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS                      U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
STEVEN A. SEARS,                                 No. 08-56899
Petitioner - Appellee,                     D.C. No. 8:08-cv-00769-DOC-
MLG
v.
UNITED STATES OF AMERICA,                        MEMORANDUM *
Respondent - Appellant.
Appeal from the United States District Court
for the Central District of California
David O. Carter, District Judge, Presiding
Argued and Submitted June 11, 2010
Pasadena, California
Before: GOODWIN, RAWLINSON, Circuit Judges, and BENNETT, District
Judge.**
The United States appeals an order, in proceedings pursuant to
    26 U.S.C. § 7609
    , quashing those parts of IRS summonses to third-party financial institutions
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The Honorable Mark W. Bennett, District Judge for the Northern
District of Iowa, sitting by designation.
seeking client-identifying information in accounts of Steven A. Sears, an attorney
and certified public accountant. The summonses were issued as part of a criminal
investigation of Sears’s tax liabilities for 2002 through 2007. The district court
held that clients’ names were irrelevant to the IRS’s investigation and that
disclosing them would be “tantamount” to revealing privileged communications.
We reverse and remand.
1.     In this case, the IRS did not receive name-redacted copies of the
requested records, the IRS could not yet determine whether there were
discrepancies between the records and the tax returns, and the district court did not
perform any in camera examination of the unredacted records to determine the
relevance of the clients’ names. Compare David H. Tedder & Assocs., Inc. v.
United States,
    77 F.3d 1166
    , 1168-69 (9th Cir. 1996). In these circumstances, “the
Service can hardly be expected to know whether [clients’ names] will in fact be
relevant until they are procured and scrutinized.” United States v. Arthur Young &
Co.,
    465 U.S. 805
    , 814 (1984).
Thus, the district court clearly erred in concluding that clients’ names were
irrelevant to the IRS’s investigation. Tedder,
    77 F.3d at 1168
     (review of IRS
summons enforcement decisions is for clear error).
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2.     This court reviews de novo the applicability of the attorney-client
privilege. United States v. Wiseman,
    274 F.3d 1235
    , 1244 (9th Cir. 2001). “It is
well-settled that there is no privilege between a bank and a depositor.” Reiserer v.
United States,
    479 F.3d 1160
    , 1165 (9th Cir. 2007) (citing Harris v. United States,
    413 F.2d 316
    , 319-20 (9th Cir. 1969)). More importantly, for present purposes,
“there is no confidentiality where a third party such as a bank either receives or
generates the documents sought by the IRS.”
    Id.
     The limited exception to this
rule, where disclosure of clients’ identities “would convey information tantamount
to a confidential communication,” United States v. Blackman,
    72 F.3d 1418
    , 1424
(9th Cir. 1995), does not apply.
We reverse and remand with instructions to grant the IRS’s Motion To Deny
Petitioner’s Petition To Quash And Declaration Of IRS Agent In Support Thereof
in its entirety, to deny Sears’s Petition To Quash Summonses in its entirety, and to
enforce the IRS’s summonses in their entirety.
REVERSED AND REMANDED.
3