United States v. LaSalle National Bank case brief

United States v. LaSalle National Bank case brief
437 U.S. 298 (1978)

CASE SYNOPSIS

Petitioners sought review of a decision of the United States Court of Appeals for the Seventh Circuit, which refused to enforce petitioner's summonses on respondent because it held that it was an improper use of the summons to serve it solely to obtain evidence for use in a criminal prosecution.

CASE FACTS
Respondent Internal Revenue Service (IRS) agent issued two summonses under 26 U.S.C.S. § 7602 to respondent bank. Respondent refused to produce the materials requested because it argued that petitioner's investigation was purely criminal in nature. Petitioners sought enforcement of the summonses.

DISCUSSION

• The court held it was an improper use of the summons to serve it solely to obtain evidence for use in a criminal prosecution. 
• The appellate court affirmed. The U.S. Supreme Court granted certiorari to determine whether the lower court correctly refused to enforce the IRS summonses when it found that petitioner agent was conducting his investigation for the purpose of unearthing evidence of criminal conduct. 
• The Court held that since Congress created a tax enforcement system with interrelated criminal and civil elements in enacting 26 U.S.C.S. § 7602, it did not intend that the IRS subpoena power in an investigation was limited merely because of the presence of a criminal purpose. 
• The IRS's subpoena power did not extend to investigations that abandoned the good-faith pursuit of its congressionally authorized civil purposes.

OUTCOME
The court reversed the lower court's decision and held that since Congress created a tax enforcement system with interrelated criminal and civil elements, it did not intend that the Internal Revenue Service's power in an investigation was limited merely because of the presence of a criminal purpose.



Recommended Supplements for Administrative Law Examples & Explanations: Administrative Law, Fourth Edition
Administrative Law and Process: In a Nutshell (Nutshell Series)