The Internal Revenue Service (IRS), having investigated the
income tax liability of a taxpayer who was a fugitive from justice,
determined deficiencies for two taxable years, and because of the
taxpayer's failure to file proper returns and his fugitive status,
made jeopardy assessments pursuant to § 6861(a) of the Internal
Revenue Code of 1954. Petitioner corporation was determined to be
the alter ego of the taxpayer. Thereafter, pursuant to a decision
to levy upon and seize automobiles registered in petitioner's name
in partial satisfaction of the assessments against the taxpayer,
agents made warrantless seizures of several such automobiles from
property in which petitioner had no interest. For the purpose of
levying on other property subject to seizure, they also went to
petitioner's office, a cottage-type building, and made a
warrantless forced entry. Pending further information as to whether
the cottage was an office or a residence, the agents made no
initial seizures, but two days later they again entered the cottage
without a warrant and seized books, records, and other property.
Thereafter petitioner, claiming that it was not the taxpayer's
alter ego, that the assessment was invalid, and that the seizures
of the automobiles and the contents of the office violated the
Fourth Amendment, instituted this suit, seeking return of the
automobiles, suppression of evidence obtained from the seized
documents, and damages from the IRS agents. The District Court
entered judgment for petitioner, finding that the IRS agents had
committed illegal searches and seizures in violation of the Fourth
Amendment. The Court of Appeals for the most part reversed, ruling
that the assessments were valid, that the evidence conclusively
established that petitioner was the taxpayer's alter ego, and that
the warrantless searches and seizures were not unconstitutional.
Section 6331(a) of the 1954 Code authorizes the IRS to collect
taxes "by levy upon all property and rights to property" belonging
to a person who "neglects or refuses to pay" any tax, and § 6331(b)
defines "levy" as including "the power of distraint and seizure by
any means."
Held:
1. This Court granted certiorari limited to the Fourth Amendment
issue, and thus accepts the Court of Appeals' determinations that
the assessments and levies were valid and that petitioner was the
taxpayer's
Page 429 U. S. 339
alter ego. Petitioner does not challenge any other aspect of
probable cause to believe that the items seized were properly
subject to seizure, and therefore the only question before the
Court is whether warrants were required. P.
429 U. S.
351.
2. The warrantless automobile seizures, which occurred in public
streets, parking lots, or other open areas, involved no invasion of
privacy and were not unconstitutional.
Murray's
Lessee v. Hoboken Land & Improv. Co., 18 How.
272. Pp.
429 U. S.
351-352.
3. The warrantless entry into the privacy of petitioner's office
violated the Fourth Amendment, since,
"except in certain carefully defined classes of cases, a search
of private property without proper consent is 'unreasonable' unless
it has been authorized by a valid search warrant."
Camara v. Municipal Court, 387 U.
S. 523,
387 U. S.
528-529. Pp.
429 U. S.
352-359.
(a) Business premises are protected by the Fourth Amendment, and
corporations have Fourth Amendment rights. The intrusion here was
based not on the nature of petitioner's business, its license, or
regulation of its activities, but on the ground that its assets
were seizable to satisfy tax assessments, which does not justify
depriving petitioner of its Fourth Amendment rights simply because
it is a corporation. Pp.
429 U. S.
353-354.
(b) Neither the history of the common law and the laws in
several States prior to the adoption of the Bill of Rights nor the
case law since that time justifies creation of a broad exception to
the warrant requirement for intrusions in furtherance of tax
enforcement. Pp.
429 U. S.
354-356.
(c) Section 6331(b) must be read as authorizing only warrantless
seizures, as opposed to warrantless searches. Pp.
429 U. S.
356-358.
(d) This case does not fall under the "exigent circumstances"
exception to the warrant requirement, as is clear from the agents'
own delay in making the entry in which the records were seized. Pp.
429 U. S.
358-359.
4. Of the various remedy issues raised by petitioner, only the
issue of damages against the individual agents need be addressed
under the limited grant of certiorari and in the present posture of
the case. Petitioner has shown violation of its constitutional
rights. Whether, as the Government contends, petitioner is not
entitled to money damages if the agents acted in good faith should
be considered by the courts below in the light of all the facts,
including IRS procedures based upon
Murray's Lessee,
supra, the existence of proof of any injury to petitioner
resulting from the entry and temporary seizure of books and
records, and the immunity issue reserved in
Bivens v. Six
Unknown Fed. Narcotic Agents, 403 U.
S. 388. Pp. 359-360.
514 F.2d 935, affirmed in part, reversed in part, and
remanded.
Page 429 U. S. 340
BLACKMUN, J., delivered the opinion for a unanimous Court.
BURGER, C.J., filed a concurring opinion,
post, p.
429 U. S.
361.
MR. JUSTICE BLACKMUN delivered the opinion of the Court.
We granted certiorari in this case, 423 U.S. 1031 (1975),
limited to the Fourth Amendment issue arising in the context of
seizures of property in partial satisfaction of income tax
assessments. [
Footnote 1]
I
Petitioner G. M. Leasing Corp. is a Utah corporation organized
in April 1972; among its stated business purposes is the leasing of
automobiles. George I. Norman, Jr., although apparently not an
incorporator, officer, or director of petitioner, was its general
manager.
In 1971, Norman was tried and convicted in the United States
District Court for the District of Colorado on two counts of aiding
and abetting a misapplication of funds from a federally insured
bank, in violation of 18 U.S.C. § § 2 and 656. He was sentenced to
two concurrent two-year terms of imprisonment. On appeal, his
conviction was affirmed.
United States v. Cooper, 464 F.2d
648, 651-652 (CA10 1972). This Court denied certiorari. 409 U.S.
1107 (1973).
Page 429 U. S. 341
Norman and his wife, on November 15, 1971, [
Footnote 2] filed a joint income tax Form 1040 for
the calendar year 1970 on which, apart from their names, address,
social security numbers, occupations, and dependents, they
indicated only that their tax for that year, "[e]stimated," was
$280,000. The sum of $289,800 was transmitted when the form was
filed, and was placed by the Internal Revenue Service in a suspense
account for future credit. Apart from the naked figure of estimated
tax, the return contained no information as to income or
deductions. App 94.
The Normans also sought and were granted an extension of time
within which to file their return for the calendar year 1971. A
check for $405,125 was given to the Service on April 15, 1972, for
application on their 1971 tax. This check evidently was dishonored.
Although further extensions of time were granted, neither of the
Normans ever filed a 1971 return.
In October, 1972, after Norman's conviction was affirmed by the
Tenth Circuit, the Service assigned the Norman account for 1970 and
1971 to Agent P. J. Clayton for investigation. Mr. Clayton,
however, took no immediate action.
Id. at 66; Tr. of Oral
Arg. 24-25.
In March, 1973, after Norman's petition for a writ of certiorari
had been denied, and after his petition for rehearing had also been
denied, 410 U.S. 959 (1973), he surrendered to the United States
Marshal for the serving of his sentence. By a ruse, however, he
immediately disappeared. Tr. of Oral Arg. 6. Norman thereupon
became a fugitive from justice; he was still one at the time of the
oral argument. App. 15; Brief for Petitioners 5; Tr. of Oral Arg.
5-6.
Upon Norman's becoming a fugitive, the Service activated its
investigation. On March 19, it determined deficiencies in Norman's
income tax liability for 1970 and 1971 in the
Page 429 U. S. 342
amounts of $406,99.34 and $545,310.59, respectively. [
Footnote 3] App. 95. These were based
solely on information from third parties concerning the amount of
stock sales Norman made through various brokerage houses.
Id. at 30, 67. [
Footnote
4] Because of Norman's failure to file appropriate returns and
because of his fugitive status, collection of the taxes as so
determined was regarded by the Service as in jeopardy; the
deficiencies, therefore, were assessed forthwith pursuant to the
authority granted by § 6861(a) of the Internal Revenue Code of
1954, 26 U.S.C. § 6861(a). [
Footnote 5]
The following day, revenue agents called at the Norman residence
in Salt Lake City to endeavor to collect the taxes.
Page 429 U. S. 343
Mrs. Norman answered the door. The agents informed her of the
jeopardy assessments and demanded payment. No payment was
forthcoming, and Mrs. Norman suggested that the agents get in touch
with her attorney. App. 56. Thereafter, pursuant to their authority
under § 6331 of the Code, the agents filed notice of tax liens with
the Salt Lake County Recorder's Office and levied on a bank account
of Norman. App. 95, 58.
While the agents were at the Norman residence, they observed
automobiles parked in the driveway. Later, upon checking with the
Utah Motor Vehicle Division, they learned that these vehicles were
registered in the name of petitioner or in the name of another
corporation owned by Norman, and that no automobile was registered
in Norman's name or in that of his wife.
Id. at 774. They
also learned that petitioner had no license to conduct business
within Salt Lake County and had no telephone listing.
Id.
at 74. It was further ascertained that, pursuant to the request of
the Utah Department of Employment Security, petitioner had filed a
Status Report. That report described the corporation's principal
business activity as "Leasing Luxury Automobiles, Boats, etc." It
recited that the corporation's "average number of employees" was
zero and that it had paid no wages while it was in existence during
the last three quarters of 1972 or thus far in 1973.
Id.
at 91-92. On its Utah Sales and Use Tax Return for the second
quarter of 1972, the corporation reported no sales.
Id. at
93. The agents regarded the automobiles seen at the Norman
residence as "show" or "collector" cars, and not the type "that
would normally be used in a leasing business."
Id. at
74.
All these facts suggested to the agents that petitioner
corporation was not engaged in any business activity but, instead,
was Norman's alter ego and a repository of at least some of his
personal assets. The agents consulted with the Service's Regional
Counsel. With his concurrence,
Page 429 U. S. 344
the conclusion was drawn that the assets of the corporation
actually belonged to Norman. Accordingly, the decision was made to
levy upon and seize automobiles titled in petitioner's name in
partial satisfaction of the assessments against Norman.
Id. at 75-76.
On or about March 21, two days after the jeopardy assessments,
revenue officers, without a warrant, seized several automobiles.
Among them were a 1972 Stutz, a Rolls Royce Phantom V, a 1930 Rolls
Royce Phantom I, two 1971 Stutzes, and a Jaguar. Three were taken
at two different locations in Salt Lake City; two at the Century
Plaza parking lot in Los Angeles, Cal.; and one near Norman's
residence in Salt Lake City.
Id. at 121, 129; Tr. of Oral
Arg. 13-14. None of the cars was on property in which petitioner
had an interest. All were registered in petitioner's name. App. 75
76. The officers left a Chevrolet and a station wagon for the
personal use of Mrs. Norman and her family. [
Footnote 6]
Id. at 58.
Also on March 21, revenue officers went to petitioner's office
in Salt Lake County to levy on property subject to seizure,
including the building itself.
Id. at 19. They had
information that one, and possibly two, luxury automobiles might be
there. Upon learning that a car was in the garage on the premises,
they telephoned their superior, Bert Applegate, and asked him to
come out to assist.
Id. at 77-79. The premises consisted
of a cottage-type building and the garage. When Applegate arrived,
a locksmith was there. He already had removed the lock from the
garage door
Page 429 U. S. 345
at the direction of the officers. A Stutz automobile was inside.
The locksmith also had removed the lock on the cottage's rear door.
Id. at 80-81.
Applegate entered the cottage. He observed that its outward
appearance was such that it could be a residence. He noticed a
kitchen. He instructed the officers not to proceed with the seizure
of any property there until the status of the cottage could be
confirmed. [
Footnote 7]
Id. at 81, 23-24. The officers then left the cottage
without taking anything, and its lock was replaced.
Id. at
82.
While the officers were in the cottage, Norman's son, George I.
Norman III, age 19, and listed as a dependent on the 1970 Form
1040, appeared. He told the officers that the Stutz belonged to the
petitioner corporation, and not to Norman.
Id. at 80, 34.
He testified that he was living at the cottage "as security."
Id. at 34. He was asked to provide evidence as to the
car's ownership. A decision was made not to seize the automobile at
that time.
Information then came to Applegate, primarily from a Mr. Redd,
who was a contractor for Norman, that the cottage was a place of
business, and not a residence.
Id. at 79. In addition,
there was activity at the cottage that night; the lights were on
and boxes were being moved. The next morning, the Stutz was not in
the garage. [
Footnote 8]
Id. at 83. Sometime during the next two days, a decision
was made to seize the cottage, its furnishings and any other assets
there. [
Footnote 9] On
Page 429 U. S. 346
March 23, [
Footnote 10]
agents, acting without a warrant, and with the assistance of
locksmiths and the equipment of a private van and storage firm,
entered the cottage and removed its remaining contents, including
furnishings and books and records. An inventory was made of the
property so seized. The agents hoped to examine the books and
records to see if they contained stock certificates or information
concerning the location of other assets. The Regional Counsel,
however, instructed them to pack the books and records, seal the
boxes, and remove them to a safe storage place.
Id. at
83-88.
In May, petitioner corporation instituted this suit. By its
amended complaint, it asserted a claim for wrongful levy, with a
request for the return of the automobiles; a claim for suppression
of all evidence obtained from the seized documents; and a claim
against the agents for damages.
Id. at 105-112. It alleged
that the assessments were arbitrary and capricious, that petitioner
was not an alter ego of Norman, and that the levy upon its premises
and the contents violated the Fourth Amendment.
Ibid.
Shortly thereafter, the Service returned to the cottage the
originals of the records and documents that had been seized. In the
meantime, however, they had been photocopied. [
Footnote 11] By a second amendment to
petitioner's complaint,
id. at 124, punitive damages,
among other relief, were requested.
Norman's son filed a complaint in intervention,
id. at
112-117, alleging essentially the same facts and requesting
Page 429 U. S. 347
similar relief. The District Court allowed his intervention. The
Government then filed a counterclaim seeking foreclosure of the tax
liens against the property held in petitioner's name.
Id.
at 127-134.
At the ensuing trial before the court without a jury, there was
testimony that Norman himself originally held title to some of the
automobiles registered in petitioner's name,
id. at 37;
that petitioner had no employees, and did not lease any cars,
id. at 37, 39; that petitioner's only assets were luxury
or vintage model automobiles; that the cars had not been
transferred to it until at or near the end of 1972; and that
petitioner never issued any stock, held any director's meetings, or
engaged in any business. [
Footnote 12]
Id. at 43-45.
The District Court entered judgment for petitioner and for the
intervenor. It found that the premises in question were the offices
of petitioner and the residence of the intervenor; that the revenue
officer defendants had no search warrant; that they forcibly
entered the premises on March 23 and again on March 25; [
Footnote 13] that they made the
entry, search, and seizure "knowing full well that they were
violating the rights" of petitioner, the intervenor, "and others";
that Agent Clayton committed the entry "maliciously"; that the
defendants returned the books and records that had been seized but
photocopied them and retained the photocopies; that the defendants
levied upon and seized all the assets of petitioner, including
seven automobiles and a bank account; that they disposed of two of
the automobiles and stored the others in Salt Lake City; that the
assessments of taxes, penalties, and interest against Norman and
his wife for 1970 and 1971 were erroneous; that Norman and his wife
had no liability for federal income tax, penalties,
Page 429 U. S. 348
or interest for those years; that petitioner had "engaged in
substantial business activity in preparation for its business
purpose of leasing automobiles"; that it was not controlled solely
by Norman or his wife; that it was not an alter ego of Norman or
his wife; and that it was not their nominee. The court concluded
that the revenue officer defendants committed an illegal search and
seizure of petitioner's offices and the intervenor's residence, in
violation of the Fourth Amendment; that the photocopies of the
seized books and records in the possession of the Service should be
destroyed, because any use of them would be illegal; that
petitioner and the intervenor were entitled to general and punitive
damages in amounts to be determined; that the Government's
counterclaim should be dismissed with prejudice; that the Service
should return all the seized assets of petitioner and of the
intervenor; and that judgment should be awarded against the United
States in favor of petitioner for the value of the two automobiles
that had been sold.
Id. at 136-142. Judgment, including
injunctive relief for the return of the automobiles and the books
and records, and for the destruction of the photocopies, was
entered accordingly.
Id. at 142-144.
The Court of Appeals, for the most part, reversed. 514 F.2d 935
(CA10 1975). It ruled that the evidence conclusively established
that petitioner was Norman's alter ego, so that its assets could be
seized to satisfy Norman's income tax liability; that the District
Court's finding to the contrary was clearly erroneous; that
petitioner had not sustained its burden of proving the assessments
to be erroneous; and that the trial court erred in invalidating the
assessments and in dismissing the Government's counterclaim. In
regard to the claim of illegal search and seizures, the Court of
Appeals held:
"The refusal to pay authorized appellants to collect the tax by
levy, and this included the power of 'seizure by any means.' Thus,
appellants were acting pursuant to
Page 429 U. S. 349
statute, and did not commit an illegal search. The trial court's
order returning the assets and suppressing the documents is
improper."
(Footnote omitted.)
Id. at 941. The court also ruled
that there was no evidence to support the trial court's finding
that Clayton's participation "was of a malicious character."
Ibid. In accord with a concession by the Government, the
Court of Appeals affirmed the trial court's judgment insofar as it
ordered the return of certain shares of stock to the intervenor.
[
Footnote 14]
II
A. Section 6331(a) of the 1954 Code authorizes the Secretary or
his delegate to collect taxes "by levy upon all property and rights
to property" belonging to a person who "neglects or refuses to pay"
any tax "or on which there is a lien . . . for the payment of such
tax." [
Footnote 15] Section
6331(b),
Page 429 U. S. 350
and § 7701(a)(21) as well, define "levy" as including "the power
of distraint and seizure by any means." Both real estate and
personal property, tangible and intangible, are subject to levy.
Levy upon tangible property normally is effected by service of
forms of levy or notice of levy and physical seizure of the
property. Where that is not feasible, the property is posted or
tagged. Because intangible property is not susceptible of physical
seizure, posting, or tagging, levy upon it is effected by serving
the appropriate form upon the party holding the property or rights
to property.
See Treas.Reg. § 301.6331-1(a)(1), 26 CFR §
301.6331-1(a)(1) (1976).
See also Phelps v. United States,
421 U. S. 330,
421 U. S.
335-337 (1975). And the Court has recognized that
compulsion on the part of the Service occasionally is required in
the enforcement of the revenue laws.
See United States v.
Bisceglia, 420 U. S. 141,
420 U. S. 145
(1975). Indeed, one may readily acknowledge that the existence of
the levy power is an essential part of our self-assessment tax
system, and that it enhances voluntary compliance in the collection
of taxes that this Court has described as "the life-blood of
government, and their prompt and certain availability an imperious
need."
Bull v. United States, 295 U.
S. 247,
295 U. S. 259
(1935).
Under § 6321 of the Code, [
Footnote 16] the assessments against Norman were a lien
in favor of the United States upon all property
Page 429 U. S. 351
belonging to Norman. If petitioner was Norman's alter ego, it
had no countervailing effect for purposes of his federal income
tax.
Griffiths v. Commissioner, 308 U.
S. 355 (1939);
Higgins v. Smith, 308 U.
S. 473,
308 U. S. 476
(1940). It would then follow that the Service could properly regard
petitioner's assets as Norman's property subject to the lien under
§ 6321, and the Service would be empowered, under § 6331, to levy
upon assets held in petitioner's name in satisfaction of Norman's
income tax liability.
See United States v. Plastic
Electro-Finishing Corp., 313 F.
Supp. 330, 33-334 (EDNY 1970),
aff'd, 71-1 USTC � 9421
(CA2 1971).
B. Our grant of certiorari was limited to the Fourth Amendment
issue, and we declined to review petitioner's and Norman's son's
claims that the assessments and levies should have been voided and
that petitioner was not Norman's alter ego. Pet. for Cert. 2, 3.
[
Footnote 17] We therefore
approach this case accepting the Court of Appeals' determinations
that the assessments and levies were valid and that petitioner was
Norman's alter ego. Those facts necessarily establish probable
cause to believe that assets held by petitioner were properly
subject to seizure in satisfaction of the assessments. Petitioner
does not claim that there was no probable cause to believe that the
automobiles were held by petitioner, nor does it claim that there
was no probable cause to believe that its offices would contain
other seizable goods. There being probable cause for the search and
seizures, the only questions before the Court are whether warrants
were required to make "reasonable" either the seizures of the cars
or the entry into and seizure of goods in the cottage.
C. The seizures of the automobiles in this case took place on
public streets, parking lots, or other open places, and did not
involve any invasion of privacy. In
Murray's
Lessee v.
Page 429 U. S. 352
Hoboken Land & Improv. Co., 18 How. 272 (1856),
this Court held that a judicial warrant is not required for the
seizure of a debtor's land in satisfaction of a claim of the United
States. The seizure in
Murray's Lessee was made through a
transfer of title which did not involve an invasion of privacy. The
warrantless seizures of the automobiles in this case are governed
by the same principles, and therefore were not unconstitutional.
See also Hester v. United States, 265 U. S.
57 (1924) (liquor seized in open field). [
Footnote 18]
D. The seizure of the books and records, however, involved
intrusion into the privacy of petitioner's offices. Significantly,
the Court has said:
"[O]ne governing principle, justified by history and by current
experience, has consistently been followed: except in certain
carefully defined classes of cases, a search
Page 429 U. S. 353
of private property without proper consent is 'unreasonable'
unless it has been authorized by a valid search warrant."
Camara v. Municipal Court 387 U.
S. 523,
387 U. S.
528-529 (1967).
See Coolidge v. New Hampshire,
403 U. S. 443,
403 U. S.
451-455 (1971);
id. at
403 U. S. 512
(WHITE, J., concurring and dissenting);
Stoner v.
California, 376 U. S. 483
(1964);
United States v. Jeffers, 342 U. S.
48 (1951);
McDonald v. United States,
335 U. S. 451
(1948);
Agnello v. United States, 269 U. S.
20 (1925).
The respondents do not contend that business premises are not
protected by the Fourth Amendment. Such a proposition could not be
defended in light of this Court's clear holdings to the contrary.
See v. City of Seattle, 387 U. S. 541
(1967);
Go-Bart Co. v. United States, 282 U.
S. 344 (1931);
Silverthorne Lumber Co. v. United
States, 251 U. S. 385
(1920). Nor can it be claimed that corporations are without some
Fourth Amendment rights.
Go-Bart Co. v. United States, supra;
Silverthorne Lumber Co. v. United States, supra; Oklahoma Press
Pub. Co. v. Walling, 327 U. S. 186,
327 U. S.
205-206 (1946);
Hale v. Henkel, 201 U. S.
43,
201 U. S. 75-76
(1906).
Cf. California Bankers Assn. v. Shultz,
416 U. S. 21
(1974);
Federal Trade Comm'n v. American Tobacco Co.,
264 U. S. 298,
264 U. S.
305-306 (1924);
Wilson v. United States,
221 U. S. 361,
221 U. S.
375-376 (1911);
Consolidated Rendering Co. v.
Vermont, 207 U. S. 541,
207 U. S.
553-554 (1908).
The Court, of course, has recognized that a business, by its
special nature and voluntary existence, may open itself to
intrusions that would not be permissible in a purely private
context. Thus, in
United States v. Biswell, 406 U.
S. 311 (1972), a warrantless search of a locked
storeroom during business hours, pursuant to the inspection
procedure authorized by the Gull Control Act of 1968, 18 U.S.C. §
923(g), was upheld:
"When a dealer chooses to engage in this pervasively
Page 429 U. S. 354
regulated business and to accept a federal license, he does so
with the knowledge that his business records, firearms, and
ammunition will be subject to effective inspection."
406 U.S. at
406 U. S. 316.
See also Colonnade Catering Corp. v. United States,
397 U. S. 72 (1970)
(Congress has broad authority to fashion standards of
reasonableness for searches and seizures to regulate the liquor
industry, but failed in that case to authorize a warrantless
search).
In the present case, however, the intrusion into petitioner's
privacy was not based on the nature of its business, its license,
or any regulation of its activities. Rather, the intrusion is
claimed to be justified on the ground that petitioner's assets were
seizable to satisfy tax assessments. This involves nothing more
than the normal enforcement of the tax laws, and we find no
justification for treating petitioner differently in these
circumstances simply because it is a corporation.
The respondents argue that there is a broad exception to the
Fourth Amendment that allows warrantless intrusions into privacy in
the furtherance of enforcement of the tax laws. We recognize that
the "Power to lay and collect Taxes" is a specifically enunciated
power of the Federal Government, Const., Art. I, § 8, cl. 1, and
that the First Congress, which proposed the adoption of the Bill of
Rights, also provided that certain taxes could be "levied by
distress and sale of goods of the person or persons refusing or
neglecting to pay." Act of Mar. 3, 1791, c. 15, § 23, 1 Stat. 204.
This, however, relates to warrantless seizures, rather than to
warrantless searches. It is one thing to seize without a warrant
property resting in an open area or seizable by levy without an
intrusion into privacy, and it is quite another thing to effect a
warrantless seizure of property, even that owned by a corporation,
situated on private premises to which access is not otherwise
available for the seizing officer.
Page 429 U. S. 355
Indeed, one of the primary evils intended to be eliminated by
the Fourth Amendment was the massive intrusion on privacy
undertaken in the collection of taxes pursuant to general warrants
and writs of assistance. [
Footnote 19] As Madison argued, urging the adoption of a
Bill of Rights to restrain the Federal Government:
"The General Government has a right to pass all laws which shall
be necessary to collect its revenue; the means for enforcing the
collection are within the direction of the Legislature: may not
general warrants be considered necessary for this purpose, as well
as for some purposes which it was supposed at the framing of their
constitutions the State Governments had in view? If there was
reason for restraining the State Governments from exercising this
power, there is like reason for restraining the Federal
Government."
1 Annals of Cong. 438 (1834 ed.).
The respondents urge that the history of the common law in
England and the laws in several States prior to the adoption of the
Bill of Rights support the view that the Fourth Amendment was not
intended to cover intrusions into privacy in the enforcement of the
tax laws. We do not find in the cited materials anything
approaching the clear evidence that would be required to create so
great an exception to the Fourth Amendment's protections against
warrantless intrusions into privacy.
The respondents also rely upon certain dicta in
Boyd v.
United States, 116 U. S. 616
(1886) [
Footnote 20]
(subpoena of private
Page 429 U. S. 356
papers impermissible).
But see Fisher v. United States,
425 U. S. 391,
425 U. S.
408-11 (1976), and
Andresen v. Maryland,
427 U. S. 463,
427 U. S.
471-472 (1976). We do not find in
Boyd any
direct holding that the warrant protections of the Fourth Amendment
do not apply to invasions of privacy in furtherance of tax
collection. Insofar as language in
Boyd might be read so
to state, we decline to follow those dicta into rejection of the
basic governing principle that has shaped Fourth Amendment law.
Finally, the respondents argue that warrantless searches are
justified by congressional enactment, as were the searches in
Biswell and
Colonnade. The statute, § 6331(b) of
the Code, 26 U.S.C. § 6331(b), authorizes "distraint and seizure by
any means."
See n
15,
supra. Read narrowly, it authorizes
Page 429 U. S. 357
the use of every means to deprive the taxpayer of use,
enjoyment, or title to property (
e.g., transferring title,
asportation, immobilization). It does not refer to warrantless
intrusions into privacy. The respondents, however, would have us
read the statute to authorize such warrantless intrusions. They
assert that a statute of that kind is permissible in light of the
considerations discussed in
Camara and
See.
Examination of the statute shows that quite the opposite is
true.
The respondents recognize that one of the Court's critical
concerns in
Camara and
See was the discretion of
the seizing officers. Brief for Respondents 66. Yet § 6331 clearly
gives the Secretary or his delegate discretion as to what property
to seize. If more than one location is involved, the Secretary will
choose which dwelling will be invaded. If property is to be found
both in public places and in private areas, the Secretary may
choose which to seize. This hardly can be called a restraint on
discretion. The respondents also recognize the concern with the
existence of questions of disputed fact. They argue that, in the
seizure situation, there are no such questions; yet in the present
case, the agents' confusion over whether the premises were an
office or a residence demonstrates the contrary.
The respondents assert that the burden on the Government of
obtaining a warrant is a relevant factor. Brief for Respondents
67-68. They suggest that the burden is great here because the
Government is dealing with persons who may attempt to put their
property beyond reach. Yet the statute authorizes distraint and
seizure whenever a taxpayer
neglects or refuses to pay his
tax, and regardless of any indication of risk of concealment. The
statute simply does not focus on situations involving a need for
rapid action.
The respondents argue that the interest in the collection of
taxes is such as to bring this case within the reasoning of
Biswell and
Colonnade. Those cases involved
voluntary
Page 429 U. S. 358
participation in a highly regulated activity. Section 6331,
however, covers all defaults on all taxes, and we are unwilling to
hold that the mere interest in the collection of taxes is
sufficient to justify a statute declaring
per se exempt
from the warrant requirement every intrusion into privacy made in
furtherance of any tax seizure.
The respondents suggest that the privacy interest in business
premises is less than that in a private home. Even if correct, the
assertion is irrelevant with respect to the intent of the statute,
for the statute makes no distinction between business properties
and dwelling areas. If it authorizes entries at all, it authorizes
entries into both business premises and private homes.
The respondents offer no legislative history in support of their
reading of § 6331, and to give the statute that reading would call
its constitutionality into serious question. We therefore decline
to read it as giving
carte blanche for warrantless
invasions of privacy. Rather, we give it its natural reading,
namely, as an authorization for all forms of seizure, but as silent
on the subject of intrusions into privacy.
The intrusion into petitioner's office is therefore governed by
the normal Fourth Amendment rule that,
"except in certain carefully defined classes of cases, a search
of private property without proper consent is 'unreasonable' unless
it has been authorized by a valid search warrant."
Camara v. Municipal Court, 387 U.S. at
387 U. S.
528-529.
As an alternative to their argument that a new exception to the
warrant requirement should be recognized, the respondents assert
that the facts of this case bring it within the "exigent
circumstances" exception to the warrant requirement. [
Footnote 21] The agents' own
actions, however, in their
Page 429 U. S. 359
delay for two days following their first entry, and for more
than one day following the observation of materials being moved
from the office, before they made the entry during which they
seized the records, are sufficient to support the District Court's
implicit finding that there were no exigent circumstances in this
case.
We therefore conclude that the warrantless entry into
petitioner's office was in violation of the commands of the Fourth
Amendment.
III
This takes us to the issue of remedy. Specifically, petitioner,
by its second amended complaint, prayed for (a) the return of the
photocopies of the books and records; (b) the return of the
automobiles; (c) a declaration that petitioner is not the alter ego
of Norman or of Mrs. Norman; (d) the suppression of all evidence
obtained from the books and records; (e) the suppression of the
automobiles as evidence; (f) the release of all levies; and (g)
general and punitive damages against the individual
defendant-agents. App. 123-124.
The alter ego issue, as has been noted, was denied review. The
books and records were returned, and the photocopies concededly
have been destroyed; that claim, thus, is moot. We have decided the
issue of the legality of the seizure of the automobiles adversely
to petitioner. The suppression issue as to the books and records,
obviously is premature, and may be considered if and when
proceedings arise in which the Government seeks to use the
documents or information obtained from them.
See Meister v.
United States, 397 F.2d 268, 269 (CA3 1968);
Hill v.
United States, 346 F.2d 175 (CA9),
cert. denied, 382
U.S. 956 (1965). And the irreparable injury required to support a
motion to suppress, under Fed.Rule Crim.Proc. 41(e), on equitable
grounds in advance of any proceedings, has not been
demonstrated.
Page 429 U. S. 360
Hunsucker v. Phinney, 497 F.2d 29, 34 (CA5 1974),
cert. denied, 420 U.S. 927 (1975).
This leaves only the issue of damages against he individual
agents. The District Court found that Agent Clayton "maliciously
committed said forced entry, and search and seizure," App. 138, and
concluded that he and other individual defendants acted "knowing
full well that they were violating the rights of" petitioner.
Ibid. It concluded that petitioner was entitled to
judgment for those actions. The Court of Appeals, in the context of
its holding that the entry and search were not illegal, ruled that
the finding of maliciousness on the part of Clayton was unsupported
by any evidence in the record, and was clearly erroneous. 514 F.2d
at 940-941. It also reversed the judgment awarding petitioner
damages.
Id. at 942.
We have held above, however, that a warrant should have been
obtained, under the circumstances of this case, before the forcible
entry was effected. This brings into focus and for consideration
this Court's decision in
Bivens v. Six Unknown Fed. Narcotics
Agents, 403 U. S. 388
(1971), and the reservation there of the immunity question. The
Government suggests that, assuming a violation of the Fourth
Amendment by the agents, petitioner is not entitled to money
damages if the agents acted in good faith; that good faith was
supported by the "apparent fact" that the agents' conduct was in
conformity with standard Service procedures based upon
Murray's
Lessee, supra; and that the record justifies the conclusion
that the agents acted in good faith. That may well be, but we
conclude that this aspect of the facts, the existence of proof of
any injury to petitioner resulting from the entry and the temporary
seizure of the books and records, and the immunity issue all should
be addressed in the first instance by the Court of Appeals and, if
it so directs, by the District Court.
Page 429 U. S. 361
The judgment of the Court of Appeals is therefore affirmed in
part and reversed in part, and the case is remanded for further
proceedings consistent with this opinion.
It is so ordered.
[
Footnote 1]
The Fourth Amendment reads:
"The right of the people to be secure in their persons, houses,
papers, and effects, against unreasonable searches and seizures,
shall not be violated, and no Warrants shall issue, but upon
probable cause, supported by Oath or affirmation, and particularly
describing the place to be searched, and the persons or things to
be seized."
[
Footnote 2]
Four extensions of time for filing had been granted. App.
99.
[
Footnote 3]
At the same time, the Service determined deficiencies in Mrs.
Norman's income tax liability for 1970 and 1971 in the amounts of
$69,265.04 and $84,873.50, respectively.
Id. at 96. Those
deficiencies are not at issue in this case.
[
Footnote 4]
Agent Clayton, called as a witness for the petitioner in the
present case, on cross-examination answered "No" to the question
whether he was "able to get any cooperation at all" from Mr.
Norman.
Id. at 30. When later called as a witness on
behalf of the respondents, Clayton also gave a negative answer to
the question whether he had received "any information from the
taxpayer or his accountant or representative."
Id. at
66.
Petitioner protests any adverse inference that might flow from
this testimony and asserts that there is no evidence that Clayton
requested assistance from Norman or his representatives who had
filed powers of attorney with the Service. Reply Brief for
Petitioners 3-4. Counsel for respondents at oral argument
stated:
"I want to correct any wrong implication, if there is one, that
they received no cooperation from Mr. Norman. . . . [N]obody had
asked him prior to that time [his becoming a fugitive] for
cooperation."
Tr. of Oral Arg. 25.
[
Footnote 5]
Jeopardy assessments of the determined deficiencies in Mrs.
Norman's taxes were also made on March 19. App. 97.
The notice which is required after jeopardy assessment by §
6861(b) of the Code enables the taxpayer to file a petition with
the United States Tax Court for a redetermination of the
deficiency.
See Laing v. United States, 423 U.
S. 161 (1976). A timely notice was sent to Norman, and a
petition was filed on his behalf with the Tax Court. His case
awaits trial there (Docket No. 6000-73).
[
Footnote 6]
The two automobiles seized in Los Angeles were a two-door tan
Stutz, valued at $30,000, and a four-door burgundy Stutz, valued at
$100,000. They were financed by loans from Murray First Thrift.
Following the levy, Murray foreclosed its own liens and arranged
with Norman's attorney for the sale of the automobiles. App. 33,
122. It appears that the Government did not participate in those
transactions, and received no portion of the proceeds of the
sales.
[
Footnote 7]
The Internal Revenue Service Manual, � 5341.1, instructs that,
if an occupant of a private residence denies a revenue officer
permission to enter, the officer should not attempt entry by
force.
[
Footnote 8]
The Service later found this particular automobile at another
location. App. 83. It had been moved by Norman's son after the
revenue agents had left on March 21.
Id. at 34.
[
Footnote 9]
Title to the cottage was in the name of Real Estate, Inc., a
corporation the Service determined to be the alter ego of Mrs.
Norman.
Id. at 97. That corporation is not a party to the
present suit, and the relief petitioner requests does not include
the return of the cottage.
[
Footnote 10]
There is some evidence in the record that this took place on
March 22, rather than March 23.
Id. at 34, 59, 77.
[
Footnote 11]
The respondents in their brief state that, while the case was
pending on appeal to the Tenth Circuit, the Service voluntarily
destroyed all existing photocopies of the seized books and records.
Brief for Respondents 16 n. 9, 76-77, and n. 43. Petitioner
concedes that the seized documents have been returned and the
photocopies destroyed. Tr. of Oral Arg. 14-15.
[
Footnote 12]
There was conflicting testimony as to whether stock was issued.
1 Tr. 553
[
Footnote 13]
This date appears to be an error.
See also n 10,
supra.
[
Footnote 14]
This portion of the judgment of the Court of Appeals affirming
the trial court is not before us. Neither is any right of the
intervenor at issue here. Tr. of Oral Arg. 13.
[
Footnote 15]
Section 6331 reads in part:
"(a) Authority of Secretary or delegate."
"If any person liable to pay any tax neglects or refuses to pay
the same within 10 days after notice and demand, it shall be lawful
for the Secretary or his delegate to collect such tax (and such
further sum as shall be sufficient to cover the expenses of the
levy) by levy upon all property and rights to property (except such
property as is exempt under section 6334) belonging to such person
or on which there is a lien provided in this chapter for the
payment of such tax. . . . If the Secretary or his delegate makes a
finding that the collection of such tax is in jeopardy, notice and
demand for immediate payment of such tax may be made by the
Secretary or his delegate and, upon failure or refusal to pay such
tax, collection thereof by levy shall be lawful without regard to
the 10-day period provided in this section."
"(b) Seizure and sale of property."
"The term 'levy' as used in this title includes the power of
distraint and seizure by any means. A levy shall extend only to
property possessed and obligations existing at the time thereof. In
any case in which the Secretary or his delegate may levy upon
property or rights to property, he may seize and sell such property
or rights to property (whether real or personal, tangible or
intangible)."
[
Footnote 16]
Section 6321 reads:
"If any person liable to pay any tax neglects or refuses to pay
the same after demand, the amount (including any interest,
additional amount, addition to tax, or assessable penalty, together
with any costs that may accrue in addition thereto) shall be a lien
in favor of the United States upon all property and rights to
property, whether real or personal, belonging to such person."
[
Footnote 17]
This effectuated a denial of the son's petition for
certiorari.
[
Footnote 18]
If additional support were needed for this result, it is found
in the Court's decisions sustaining the right of the Government to
collect taxes by summary administrative proceedings. Thus, in
Bull v. United States, 295 U. S. 247,
295 U. S. 260
(1935), it was stated that a tax assessment
"is given the force of a judgment, and if the amount assessed is
not paid when due, administrative officials may seize the debtor's
property to satisfy the debt."
See also Cheatham v. United States, 92 U. S.
85,
92 U. S. 87-90
(1876);
State Railroad Tax Cases, 92 U. S.
575,
92 U. S.
612-615 (1876);
Graham v. Du Pont, 262 U.
S. 234,
262 U. S. 255
(1923). The rationale underlying these decisions, of course, is
that the very existence of government depends upon the prompt
collection of the revenues. In
Phillips v. Commissioner,
283 U. S. 589,
283 U. S.
596-597 (1931), the Court rejected a constitutional
challenge to the statutory system under which taxes may be
collected summarily without a pre-seizure judicial hearing. It was
held that, as long as there was an adequate opportunity for a
post-seizure determination of the taxpayer's rights, the statute
met the requirements of due process.
See Commissioner v.
Shapiro, 424 U. S. 614,
424 U. S.
630-633 (1976);
Fuentes v. Shevin, 407 U. S.
67,
407 U. S. 91-92
(1972). These cases, of course, center upon the Due Process Clause,
rather than the Fourth Amendment, but the constitutional analysis
is similar, and yields a like result. It is to be noted that the
Court, in Phillips, 283 U.S. at
283 U. S. 596,
cited
Murray's Lessee with approval as a case which
sustained proceedings "more summary in character" and "involving
less directly the obligation of the taxpayer."
[
Footnote 19]
See T. Taylor, Two Studies in Constitutional
Interpretation 41 (1969); N. Lasson, The History and Development of
the Fourth Amendment to the United States Constitution 51-78
(1937); J. Landynski, Search and Seizure and the Supreme Court 342
(1966).
[
Footnote 20]
In
Boyd, the Court stated:
"The search for and seizure of stolen or forfeited good, or
goods liable to duties and concealed to avoid the payment thereof,
are totally different things from a search for and seizure of a
man's private books and papers for the purpose of obtaining
information therein contained, or of using them as evidence against
him."
116 U.S. at
116 U. S. 623.
The Court's concern in
Boyd was with establishing the
impermissibility of the subpoena of papers. It was not concerned
with the warrant requirement for entry into private places. The
Court, however, did say:
"The entry upon premises, made by a sheriff or other officer of
the law, for the purpose of seizing goods and chattels
by
virtue of a judicial writ such as an attachment, a
sequestration, or an execution, is not within the prohibition of
the Fourth or Fifth Amendment, or any other clause of the
Constitution."
Id. at
116 U. S. 624
(emphasis added). The Court was not concerned with, and therefore
did not explain, whether the "judicial writ" referred to above was
necessary in order to meet the warrant requirements. The opinion
does describe the "obnoxious writs of assistance" against which the
Fourth Amendment was designed to protect. This description gives an
indication of the types of tax enforcement actions that the
Amendment's protections were intended to reach:
"Even the act under which the obnoxious writs of assistance were
issued did not go as far as this, but only authorized the
examination of ships and vessels, and persons found therein for the
purpose of finding goods prohibited to be imported or exported, or
on which the duties were not paid, and to enter into and search any
suspected vaults, cellars, or warehouses for such goods."
(Footnote omitted.)
Id. at
116 U. S.
623.
[
Footnote 21]
There is no claim that any other exception to the warrant
requirement, such as "hot pursuit," "plain view," or "pursuant to
an arrest," is applicable here.
MR. CHIEF JUSTICE BURGER, concurring.
While I concur in the opinion of the Court, it may be useful to
note that the factual setting of this case provides what seems, to
me, a classic illustration of the dividing line between an
impermissible, warrantless entry and one permissible under the
"exigent circumstances" exception to the Fourth Amendment warrant
requirement.
After their initial entry into, and retreat from, the
petitioner's office-cottage, the IRS agents assigned to the
investigation of the fugitive Norman's tax liability placed the
premises under 2-hour surveillance. One night during the course of
this surveillance, the agents observed cartons and other materials
being removed from the premises by persons unknown to them. Against
the background facts, such surreptitious nighttime activity
constituted an exigent circumstance that would have justified an
immediate seizure of the materials being moved in order to protect
the interests of the United States. This is especially so since
here the premises were controlled by the alter ego of an individual
who was not only a delinquent taxpayer, but who was, at the time, a
fugitive from justice. Rather than acting immediately, however, the
agents chose to wait for approximately a day and a half to two days
before making their entry. I agree with the conclusion that there
were no exigent circumstances on these facts; however, the Court
holds no more than that the agents' delay after observing these
highly suspicious events makes that exception to the warrant
requirement unavailable to them. By failing to act at once, the
exigency was dissipated, and I do not understand our
Page 429 U. S. 362
opinion to imply in any way that the removal of cartons, which
could reasonably have contained relevant records needed by the
Government, would not have been an exigent circumstance permitting
immediate seizure without the warrant required by the Fourth
Amendment.