Miranda v. Arizona, 384 U.S. 436 (1966) helped create a generation of citizens that are very well aware of their Fifth Amendment rights against self-incrimination as it became repeated over and over in nearly every crime drama on television and movies. However, as Monday’s Supreme Court ruling continues to affirm, there are exceptions to the rule.
Following a line of reasoning that become a standard with Shapiro v. U.S., (S Ct 1948) 335 U.S. 1, which was further refined in Grosso v. U.S., (S Ct 1968) 21 AFTR 2d 55421 AFTR 2d 554, the Supreme Court has held that the government can compel production of self-incriminating documents so long as a three prong test is met: (1) the reporting or recordkeeping scheme must have an essentially regulatory purpose; (2) a person must customarily keep the records that the scheme requires him to keep; and (3) the records must have public aspects.
On Monday, the Supreme Court continued its support of this exception when it refused to hear an appeal brought by Eli and Renee Chabot, Chabot, (CA 3 7/17/2015) 116 AFTR 2d 2015-5270, cert denied 11/30/2015. The facts show that the IRS made a demand under the provisions of the Bank Secrecy Act for copies of bank statements of accounts the Chabot’s held in an HSBC branch in France. The Chabots refused to produce these statements claiming they had a Fifth Amendment right to not produce documents that could incriminate them as potential participants in illegal activities.
The Third Circuit ruled that the IRS was entitled to demand the documents by ruling that the records were essential to regulatory purposes, that they were required documents, and that they had public aspects. Similar cases in the Second, Fourth, Fifth, seventh, Ninth and Eleventh Circuits have had the same result. (in re Grand Jury Subpoena Dated Feb. 2, 2012, (CA 2 2013) 741 F.3d 339; Under Seal, (CA 4 2013) 112 AFTR 2d 2013-7316112 AFTR 2d 2013-7316; In re Grand Jury Subpoena, (CA 5 2012) 696 F.3d 428; In re Special Feb. 2011-1 Grand Jury Subpoena Dated Sept. 12, 2011, (CA 7 2012) 691 F.3d 903; In re Grand Jury Investigation M.H., (CA 9 2011) 108 AFTR 2d 2011-5880108 AFTR 2d 2011-5880; In re Grand Jury Proceedings, (CA 11 2013) 111 AFTR 2d 2013-794111 AFTR 2d 2013-794)
With the Supreme Court’s Monday ruling, this exception to the Fifth Amendment remains fully in place and enforceable. Basically, if there is a regulatory business purposes of a document, even if it would incriminate you, you will be required to turn it over to the IRS.