Graham v. Commissioner , 82 T.C. 299 ( 1984 )

OPINION

Parker, Judge:

Respondent has determined the following deficiencies in and additions to these petitioners’ Federal income taxes:

Docket No. Year Deficiency Sec. 6653(b)¹

7603-80 1969 $34,301 $17,151

7603-80 1970 62,689 31,345

7603-80 1971 64,849 32,425

7603-80 1972 28,513 14,256

7604-80 1969 36,344 18,172

7604-80 1970 58,905 31,603

7604-80 1971 74,700 37,350

7604-80 1972 71,291 35,646

Respondent’s statutory notices of deficiency to these petitioners were based upon information respondent secured from grand jury proceedings. We must decide whether respondent’s use of these grand jury materials to determine deficiencies and additions against these petitioners invalidates the statutory notices.

These cases were submitted fully stipulated under Rule 122, Tax Court Rules of Practice and Procedure, and the stipulated facts are so found. The stipulation of facts and exhibits attached thereto are incorporated herein by this reference. The pertinent facts are summarized below.

Petitioners Thomas A. Graham and Elizabeth Graham (the Grahams), husband and wife, resided in Gwynedd Valley, Pa., at the time they filed their petition herein. The Grahams timely filed their joint Federal income tax returns for the taxable years 1969, 1970, 1971, and 1972, using the cash receipts and disbursements method of accounting.

Petitioner Meridian Engineering, Inc. of Pennsylvania (Meridian) is a corporation and its last address, effective at the time it filed its petition herein, was in Philadelphia, Pa. Meridian timely filed its corporate income tax returns for the calendar years 1969, 1970, 1971, and 1972, using the accrual method of accounting. Petitioner Thomas A. Graham was president, chairman of the board, and principal shareholder of Meridian.

In September 1971, a Federal grand jury, sitting in Philadelphia, began an investigation of certain purchases and contracts between various vendors and contractors and the city of Philadelphia. The investigation was to determine possible Federal criminal violations, including extortion, racketeering, bribery, mail fraud, and conspiracy. On October 4, 1971, the U.S. attorney for the Eastern District of Pennsylvania and a Justice Department attorney filed an ex parte motion with the District Court, pursuant to rule 6(e) of the Federal Rules of Criminal Procedure (hereinafter rule 6(e)),² seeking authorization to disclose to agents, special agents, and employees of the Internal Revenue Service matters occurring before the grand jury. In support of this motion, the Government attorneys represented, in pertinent part, as follows:

3. The investigation requires careful meticulous analysis of an extremely large volume of business records, of the contractors and vendors involved, and also of the City of Philadelphia.

4. The above-named attorneys of the Government have sought the assistance of agents, special agents, and employees of the Internal Revenue Service to conduct the necessary analysis of records and to provide the necessary supportive investigative personnel, all under the aegis of the said attorneys for the government.

5. To utilize the said assistance of agents, special agents, and employees of the Internal Revenue Service it is necessary that the said attorneys for the Government be authorized to disclose to the agents, special agents and employees of the Internal Revenue Service books, records, documents and transcripts of testimony before the United States Grand Jury.

6. It is necessary for the said agents, special agents and employees of the Internal Revenue Service, upon receipt of such matter to use it in their official duties, for both civil and criminal purposes, in order to both assist the Grand Jury and the attorneys for the Government in a complete manner, and to fulfill the obligations of their offices. [Emphasis added.]

On October 4, 1971, District. Court Judge Edward R. Becker entered an order granting the ex parte motion, providing as follows:

ORDER

And Now, This 4th day of October, 1971, upon consideration of the Ex Parte Motion pursuant to [Criminal] Rule 6(e) for Authorization to Disclose Matters Occurring Before the Grand Jury, filed herein, and the representations made in support thereof, it is hereby

ORDERED

that the United States Attorney and Special Attorneys of the United States Department of Justice are authorized to utilize the assistance of agents, special agents and employees of the Internal Revenue Service in this Grand Jury Investigation, and may give access to such persons of books, records, documents and transcripts of testimony before the Grand Jury in this investigation, and the said agents, special agents, and employees shall not be prohibited from utilizing such material in the course of their official duties, for either criminal or civil purposes, provided that the subpoenaed material shall remain at all times under the aegis of attorneys for the Government. [Emphasis added.]

On January 15, 1973, the grand jury issued a subpoena directing Meridian to produce the following records:

Sales, Journals, Sales Invoices, Accounts Payable, Ledgers General Journals, General Ledgers, Payroll Records, Invoices, Purchase Orders, Notes Payable, Loans Payable (Contracts and Records), Articles of Incorporation, Stock Transfer Book, Minutes Book, Cash Receipts Book, Cash Disbursement Book, Bank Ledger Statements, Check Stub Registers, Cancelled Checks, Duplicate Deposit Tickets, Petty Cash Book, Petty Cash Vouchers, Purchase Journals, Purchase Invoices, Memoranda, Correspondence, and all other supporting documents relating to all business transactions, income, expenses, and balance sheet items shown on filed tax returns; all for calendar years or fiscal years ended 1969, 1970, and 1971.

The subpoena directed Meridian to deliver the subpoenaed records to the Internal Revenue Service in Philadelphia, Pa. Meridian complied with the subpoena.

On October 25, 1973, another Federal grand jury was convened in Philadelphia to investigate possible Federal criminal violations, including interference with commerce, conspiracy to defraud the Government, interstate travel in aid of racketeering, and tax evasion.

On November 20, 1973, the U.S. attorney filed an ex parte petition under rule 6(e) for authorization to disclose matters occurring before the grand jury to agents of the Internal Revenue Service "to assist the Grand Jury in determining whether there have been any violations of Title 18 and Title 26 of the United States Code; and if the above-mentioned investigation discloses additional tax liabilities, to use this information for determining the exact civil tax liabilities due and owing to the United States.” (Emphasis added.) In support of this petition, the U.S. attorney represented, in pertinent part, as follows:

2. In connection with this investigation, information and evidence has been obtained by the Grand Jury that could be of material assistance to the Internal Revenue Service with respect to official criminal investigations being conducted by that agency, and the disclosure of such evidence to the Internal Revenue Service would enable that agency to be of invaluable assistance to the Grand Jury in the investigation being conducted by the Grand Jury.

3. The Grand Jury has requested the assistance of Federal agents who possess the requisite expertise to assist them in analyzing the notes of testimony of witnesses who testify and the books and records subpoenaed before them.

The U.S. attorney’s prayer in his petition also asked that "agents, officials and employees of the Internal Revenue Service * * * shall not be prohibited from utilizing such [grand jury] material in the course of their official duties for civil purposes.” (Emphasis added.)

On November 20, 1973, District Court Judge A. Leon Higginbotham, Jr., entered an order granting the ex parte petition, providing as follows:

ORDER

And Now, this 20th day of November, 1973, upon consideration of the Ex Parte Motion pursuant to Rule 6(e) for Authorization to Disclose Matters Occurring Before the Grand Jury, filed herein, and the representations made in support thereof, it is hereby

ORDERED

that the United States Attorney is authorized to utilize the assistance of agents, special agents and employees of the Internal Revenue Service in this Grand Jury Investigation, and may give access to such persons of books, records, documents and transcripts of testimony before the Grand Jury in this investigation, and the said agents, special agents and employees shall not be prohibited from utilizing such material in the course of their official duties, for either criminal or civil purposes, provided that the subpoenaed material shall remain at all times under the aegis of the attorneys for the Government. [Emphasis added.]

On April 4,1974, District Court Judge Daniel H. Huyett III, approved the granting of immunity to petitioner Thomas A. Graham in connection with his testimony before the October 25, 1973, grand jury. On April 24, 1974, Graham was subpoenaed to appear before the grand jury and to produce—

(1) All cancelled checks drawn on any individual joint or trustee bank account for the period from 1969 through 1973 inclusive; (2) All bank statements drawn on any individual joint or trustee bank account for the period from 1969 through 1973 inclusive; (3) All bank deposit slips drawn on any individual joint or trustee bank account for the period from 1969 through 1973 inclusive; and (4) All diaries, appointment books, schedule books, calendars reflecting appointments or meetings for the year 1973.

Graham moved to quash the subpoena, or alternatively, for a protective order directing that no documents produced pursuant to the subpoena be turned over to Internal Revenue agents for their civil investigation. In support of his motion, Graham argued, inter alia, that the rule 6(e) order granting the Internal Revenue Service access to the subpoenaed material authorized a misuse of the grand jury’s powers, that the instant subpoena had been issued solely for the purpose of a civil tax investigation, and that the use of the grand jury was a mere subterfuge to supply records to the Internal Revenue Service for civil purposes.

In response to Graham’s motion, the U.S. attorney represented that Graham’s testimony and production of documents were necessary to the grand jury’s criminal investigation. In his memorandum in opposition to Graham’s motion, the U.S. attorney argued, inter alia: (1) That there was no bad faith or improper motive in the issuance of the grand jury subpoena; (2) that the issue of the civil use of the subpoenaed material was not presently before the District Court, specifically stating:

It is submitted that the appropriate time to raise any issues regarding the civil use of material subpoenaed by the grand jury is when and if the materials are used for a civil purpose. Furthermore, it is submitted that all questions regarding the use of subpoenaed materials for civil tax purposes should properly be addressed to the Tax Court in accordance with the usual procedures for contesting civil tax questions;

and (3) that in any event, the November 20, 1973, rule 6(e) order was proper and in accord with existing legal standards governing the use of grand jury material, including possible civil use of the grand jury materials by the Internal Revenue Service.

On June 3, 1974, Judge Daniel H. Huyett III, issued the following order:

ORDER

And Now, this 3rd day of June, 1974, upon consideration of Thomas A. Graham’s Motion to Quash Subpoena Or, in the Alternative, Motion For Protective Order and the Government’s Response thereto, after consideration of the memoranda of law filed by both parties and after hearing, oral argument by both parties, it is hereby Ordered that the motion to quash the subpoena duces tecum to Thomas A. Graham be and is hereby Denied and it is further Ordered that the alternative motion for a protective order with respect to documents produced pursuant to said subpoena be and is hereby Denied.

On February 20, 1980, respondent issued and mailed to the Grahams and to Meridian statutory notices of deficiency covering the taxable years 1969 through 1972. The primary adjustment to the Grahams’ income for the taxable years 1969 through 1972 was for únreported dividend income received from Meridian. The primary adjustment to Meridian’s income for the taxable years 1969 through 1972 was for disallowed business expenses. Most of the constructive dividends to the Grahams are the business expenses disallowed to Meridian. The information upon which respondent determined the deficiencies and fraud additions was based on or gleaned from documents, testimony, and other information secured by agents of the Internal Revenue Service from these grand jury proceedings.

Petitioners allege that the Internal Revenue Service’s use of these grand jury materials constituted misuse and abuse of those proceedings, requiring invalidation of the statutory notices of deficiency. Respondent, while admitting his use of the grand jury materials, denies that such use was improper or that the statutory notices are invalid. Petitioners declined the opportunity for a trial and have stipulated³ as follows:

5. Petitioners Thomas A. Graham and Elizabeth Graham agree that if it is finally determined that the notice of deficiency issued to them for the years in issue is not invalid the deficiencies in income tax and additions to tax determined therein, although not admitted, are uncontested so that decision may be entered in accordance with respondent’s determinations contained in the statutory notice of deficiency * * * without the necessity for the introduction of any evidence by petitioners or respondent.

10. Petitioner Meridian Engineering, Inc. of Pennsylvania agrees that if it is finally determined that the notice of deficiency covering the years in issue is not invalid the deficiencies in income tax and additions to tax determined therein are correct, although not admitted, are uncontested so that decision may be entered in accordance with respondent’s determinations contained in the statutory notice of deficiency * * * without the necessity for the introduction of any evidence by petitioner or respondent.

The parties devoted most of their argument to the question of whether respondent’s use of the grand jury materials to determine deficiencies and the fraud additions against these petitioners was proper. However, in two recent cases addressing the parameters of rule 6(e)(2) and (3), as presently in force,⁴ the Supreme Court reaffirmed the traditional secrecy of grand jury proceedings and severely limited Internal Revenue Sér-vice access to grand jury materials for civil tax purposes. See United States v. Sells Engineering, Inc., 463 U.S. 300 (1983); United States v. Baggot, 463 U.S. _ (1983).

Rule 6(e)(2) of the Federal Rules of Criminal Procedure provides generally that grand jury proceedings are secret. Rule 6(e)(3) contains exceptions permitting disclosure of grand jury materials in certain situations. Rule 6(e)(3)(A)(i) (hereinafter (A)(i)) permits disclosure without a court order to "an attorney for the government for use in the performance of such attorney’s duty.” Rule 6(e)(3)(A)(ii) (hereinafter (A)(ii)) permits similar automatic disclosure without a court order to certain Government personnel, including IRS agents, who are considered necessary "to assist an attorney for the government in the performance of such attorney’s duty to enforce federal criminal law.” Rule 6(e)(3)(C)(i) (hereinafter (C)(i)) permits disclosure under a court order issued "preliminarily to or in connection with a judicial proceeding.” Addressing these exceptions to the rule of grand jury secrecy, the Supreme Court, in Sells Engineering ruled that Justice Department lawyers cannot obtain grand jury materials for civil purposes under the automatic disclosure provisions of (A)(i) and that both the (A)(i) and (A)(ii) automatic disclosure provisions are limited to criminal law enforcement purposes. Thus, any disclosure to Internal Revenue agents, special agents, or other personnel for civil purposes is now clearly limited to disclosure under court order under (C)(i) upon a showing of "particularized need.” In the Baggot case, the Supreme Court further held that a civil tax audit is not "preliminarily to or in connection with a judicial proceeding” within the meaning of (C)(i).

Thus, while the full scope of the Supreme Court’s holdings in Sells Engineering and Baggot may be the subject of continuing disagreement and debate,⁵ it is clear that an IRS civil tax audit cannot be considered as "preliminary to or in connection with a judicial proceeding” within the meaning of (C)(i). The present case involves rule 6(e) orders issued prior to the 1977 amendment of the rule and prior to these Supreme Court cases, which orders expressly allowed the IRS agents and personnel to use the grand jury materials for civil tax purposes.

In his supplemental brief addressing the impact of the Supreme Court’s Baggot and Sells Engineering cases, respondent appears to concede, as he must, that a civil tax audit is no longer a permissible ground for granting access to. grand jury materials under rule 6(e)(3)(C)(i). Instead, respondent argues that the Supreme Court’s rulings in Baggot and Sells Engineering should be applied only prospectively. Respondent also seems to argue that District Court’s orders under rule 6(e) preclude our review of respondent’s access to and use of grand jury materials in this case.⁶ For purposes of our decision, we assume without deciding that respondent’s use of the grand jury materials was improper and that the Supreme Court’s Baggot and Sells Engineering rulings apply with full retroactive effect. See Sells, Inc. v. United States, 719 F.2d 985 (9th Cir. 1983), revg. and remanding an unreported District Court decision; contra Stein v. United States, an unreported case (D.N.J. 1983, 84-1 USTC par. 9101). We likewise assume, without deciding, that the District Court orders under rule 6(e) do not preclude us from examining respondent’s use of the grand jury materials. But see Estate of Temple v. Commissioner, 65 T.C. 776, 782-783 (1976).

Petitioners argue that respondent’s improper use of the grand jury materials to determine deficiencies and additions against them renders the statutory notices of deficiency null and void, requiring that we invalidate these notices and enter decision for petitioners. We do not agree.

It is well established that ordinarily this Court will not look behind a statutory notice of deficiency to examine the evidence used or the propriety of respondent’s motives or conduct in determining the deficiency. Scar v. Commissioner, 81 T.C. 855 (1983); Riland v. Commissioner, 79 T.C. 185, 201 (1982); Llorente v. Commissioner, 74 T.C. 260, 264 (1980), affd. in part and revd. in part 649 F.2d 152 (2d Cir. 1981); Jackson v. Commissioner, 73 T.C. 394, 400 (1979); Greenberg’s Express, Inc. v. Commissioner, 62 T.C. 324, 327 (1974). We have recognized two possible exceptions to the general rule: (1) Where there is substantial evidence of unconstitutional conduct by respondent in determining the deficiency (Riland v. Commissioner, 79 T.C. at 207; Greenberg’s Express, Inc. v. Commissioner, 62 T.C. at 328; Suarez v. Commissioner, 58 T.C. 792, 814 (1972), overruled in part, Guzzetta v. Commissioner, 78 T.C. 173, 184 (1982)), and (2) in the so-called "naked assessment” cases "involving unreported income where the respondent introduced no substantive evidence but rested on the presumption of correctness and the petitioner challenged the notice of deficiency on the grounds that it was arbitrary.” Jackson v. Commissioner, 73 T.C. at 401. See Human Engineering Institute v. Commissioner, 61 T.C. 61, 66 (1973), appeal dismissed (6th Cir., Apr. 1, 1975), cert. denied 423 U.S. 860 (1975). However, in neither limited circumstance did we hold the statutory notice to be null and void, the remedy that petitioners here seek. See Riland v. Commissioner, 79 T.C. at 207; Jackson v. Commissioner, 73 T.C. at 401; Greenberg’s Express, Inc. v. Commissioner, 62 T.C. at 328; Human Engineering Institute v. Commissioner, 61 T.C. at 66; Suarez v. Commissioner, 58 T.C. at 814.

Wholly apart from the question of the remedy to be afforded, petitioners may not invoke the so-called "naked assessment” rule in this case. See United States v. Janis, 428 U.S. 433, 441-443 (1976). See and compare Llorente v. Commissioner, 649 F.2d 152 (2d Cir. 1981), affg. in part and revg. in part 74 T.C. 260 (1980); De Cavalcante v. Commissioner, 620 F.2d 23 (3d Cir. 1980), affg. a Memorandum Opinion of this Court; Weimerskirch v. Commissioner, 596 F.2d 358 (9th Cir. 1979), revg. 67 T.C. 672 (1977); Carson v. United States, 560 F.2d 693 (5th Cir. 1977); Gerardo v. Commissioner, 552 F.2d 549 (3d Cir. 1977), affg. in part and revg. in part a Memorandum Opinion of this Court; Jackson v. Commissioner, supra. Even assuming the "naked assessment” rule applies,⁷ the parties’ stipulation that the deficiencies and additions may be entered pursuant to respondent’s statutory notice "without the necessity for the introduction of any evidence by * * * respondent” satisfies whatever "minimal predicate evidence” he would be required to adduce under this rule. See De Cavalcante v. Commissioner, 620 F.2d at 27-28; Gerardo v. Commissioner, 552 F.2d at 552-555; Karme v. Commissioner, 673 F.2d 1062, 1065 (9th Cir. 1982), affg. 73 T.C. 1163 (1980).

In presenting their argument, petitioners apparently fail to recognize that the existence of a legal wrong (improper use of grand jury materials) is a completely separate question from the remedy to be afforded upon proof of that legal wrong. On brief, petitioners seem to argue that invalidation of the statutory notices automatically follows from a finding of improper use by respondent of the grand jury materials. Thus, at times, petitioners seem to argue that their stipulation, quoted above, conditionally conceding the deficiencies and additions, becomes effective only upon our finding that respondent’s úse of the grand jury materials in this case was legal and proper. However, on brief prepared by counsel, petitioners demonstrate an understanding of the legal principles discussed above. Petitioners never adequately addressed respondent’s argument on brief, which we have accepted, that invalidation of the statutory notice of deficiency is not the appropriate remedy even if we find improper use of grand jury materials. Moreover, at no time have petitioners sought to be relieved of their stipulation.

Thus, even assuming the illegality of respondent’s use of the grand jury materials in this case, such use does not render the statutory notices null and void, requiring invalidation of the statutory notices.⁸ Since petitioners have conceded the deficiencies and fraud additions absent invalidation of the statutory notices, we leave to another day the determination of the appropriate remedy in this Court where respondent has improperly used grand jury materials in preparing a statutory notice of deficiency.⁹ We simply hold that invalidation of the statutory notice is not that remedy.¹⁰

Since we hold that the statutory notices are not invalid,

Decisions will be entered for the respondent.

Reviewed by the Court.

1 Unless otherwise indicated, all section references are to the Internal Revenue Code of 1954 as amended and in effect during the taxable years in question.

2 Prior to 1977, rule 6(e) provided as follows:

Rule 6. The Grand Jury

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(e) Secrecy of Proceedings and Disclosure. Disclosure of matters occurring before the grand jury other than its deliberations and the vote of any juror may be made to the attorneys for the government for use in the performance of their duties. Otherwise a juror, attorney, interpreter, stenographer, operator of a recording device, or any typist who transcribes recorded testimony may disclose matters occurring before the grand jury only when so directed by the court preliminarily to or in connection with a judicial proceeding or when permitted by the court at the request of the defendant upon a showing that grounds may exist for a motion to dismiss the indictment because of matters occurring before the grand jury. No obligation of secrecy may be imposed upon any person except in accordance with this rule. The court may direct that an indictment shall be kept secret until the defendant is in custody or has given bail, and in that event the clerk shall seal the indictment and no person shall disclose the finding of the indictment except when necessary for the issuance and execution of a warrant or summons.

3 There are slight differences in the wording of these two paragraphs of the stipulation, but the parties have not suggested that these differences are meaningful. We attach no significance to the different wording.

4 Rule 6(e)(2) and (3), as discussed by the Supreme Court and without certain amendments effective as of Aug. X, 1983, read as follows:

(e) Recording and Disclosure of Proceedings.

(2) General Rule of Secrecy. — A grand juror, an interpreter, a stenographer, an operator of a recording device, a typist who transcribes recorded testimony, an attorney for the government, or any person to whom disclosure is made under paragraph (3)(A)(ii) of this subdivision shall not disclose matters occurring before the grand jury, except as otherwise provided for in these rules. No obligation of secrecy may be imposed on any person except in accordance with this rule. A knowing violation of Rule 6 may be punished as a contempt of court.

(3) Exceptions.

(A) Disclosure otherwise prohibited by this rule of matters occurring before the grand jury, other than its deliberations and the vote of any grand juror, may be made to—

(i) an attorney for the government for use in the performance of such attorney’s duty; and

(ii) such government personnel as are deemed necessary by an attorney for the government to assist an attorney for the government in the performance of such attorney’s duty to enforce federal criminal law.

(B) Any person to whom matters are disclosed under subparagraph (A)(ii) of this paragraph shall not utilize that grand jury material for any purpose other than assisting the attorney for the government in the performance of such attorney’s duty to enforce criminal law. An attorney for the government shall promptly provide the district court, before which was impaneled the grand jury whose material has been so disclosed, with the names of the persons to whom such disclosure has been made.

(C) Disclosure otherwise prohibited by this rule of matters occurring before the grand jury may also be made—

(i) when so directed by a court preliminarily to or in connection with a judicial proceeding; or

(ii) when permitted by a court at the request of the defendant, upon a showing that grounds may exist for a motion to dismiss the indictment because of matters occurring before the grand jury.

If the court orders disclosure of matters occurring before the grand jury, the disclosure shall be made in such manner, at such time, and under such conditions as the court may direct.

5 See the dissenting opinions in both cases. See also Bender & Bender, "Supreme Court in Sells and Baggot Lays Down Tests for Disclosing Grand Jury Materials,” 59 J. Tax. 138-141 (1983); Miller, "Civil Tax Audit Access to Grand Jury Materials—United States v. Baggot,” 51 U.S.L.W. 5075 (June 30,1983); Tax Management Memorandum, TMM 83-21, at 3-8 (Oct. 17,1983); Garbis, Struntz & Saltzman, "What the Tax Practitioner Should Know About the Supreme Court’s Baggot and Sells Decisions,” Fed. Taxes (Dec. 28, 1983).

6 Eespondent’s argument to this point is not entirely clear. He has phrased the basis for nonreviewability on (1) comity, (2) res judicata (District Court orders are not reviewable collaterally in these proceedings), and (3) apparently a variation of a "good faith” exception to the exclusionary rule.

7 The deficiencies in this case largely result from disallowed deductions to the corporation resulting in constructive dividends to the shareholder. Although the stipulated documents hint at alleged bribery and extortion by petitioners, the record does not indicate the exact source or nature of the disallowed payments by Meridian resulting in constructive dividends to the Grahams. It is not clear that such payments would in any event be within the "naked assessment” rule, since cases applying that "rule” have uniformly involved unreported income from illegal sources, such as gambling or narcotics. See cases cited in text above. We express no opinion regarding the parameters of the "naked assessment” rule as applied by the various circuit courts. See Jackson v. Commissioner, 73 T.C. 394, 404-405 (1979). See also Karme v. Commissioner, 673 F.2d 1062 (9th Cir. 1982), affg. 73 T.C. 1163 (1980).

8 Petitioners’ reliance upon Cohen v. Commissioner, a Memorandum Sur Order of this Court unofficially reported at 42 T.C.M. 312, 50 P-H Memo T.C. par. 81,901 (1981), is misplaced. In Cohen, the Government did not secure rule 6(e) orders before the IRS obtained access to grand jury materials. Moreover, in Cohen, we denied the taxpayers’ motions to dismiss and for summary judgment. We also denied their motion to shift the burden of proof to the respondent. In view of the narrow issue presented for our decision in this case, particularly in light of the parties’ stipulation, we have no occasion to consider the remedy afforded the taxpayers in Cohen.

9 In particular, we decline to express any opinion in regard to the application of the so-called "exclusionary rule” in Tax Court proceedings. See Black Forge, Inc. v. Commissioner, 78 T.C. 1004 (1982); Guzzetta v. Commissioner, 78 T.C. 173, 175 n. 2 (1982); Tirado v. Commissioner, 74 T.C. 14, 29 (1980), affd. on other grounds 689 F.2d 307 (2d Cir. 1982); Proesel v. Commissioner, 73 T.C. 600, 610 (1979). See also United States v. Janis, 428 U.S. 433, 456 (1976).

10 “Because of the apparent widespread IRS access to grand jury materials for its civil tax audits prior to Sells Engineering and Baggot, it might be useful to expound upon the ramification of these decisions in this Court, specifically the questions of reviewability, retroactivity, and remedy. Since our views on these questions would not affect the result in this case, we decline to address them. This judicial restraint, by no means unique to this Court, is based upon certain overlapping doctrines of judicial administration (including ripeness, mootness, and advisory opinions), doctrines reflecting "a sound principle of judicial administration that courts will not gratuitously decide complex issues that cannot affect the disposition of the case before them.” LTV Corp. v. Commissioner, 64 T.C. 589, 595 (1975). See also Roderick v. Commissioner, 57 T.C. 108, 112-113 (1971).