UPDATE: U.S. Supreme Court Considers “Required Records” Case

UPDATE:  The Supreme Court announced this morning that it has denied the petition for writ of certiorari in this case (see Order List here) meaning that that Court will not hear the case.

Today the U.S. Supreme Court met in conference to decide whether to grant a writ of certiorari in the case T.W. v. United States, No. 12-853.  The cert petition filed in the case raises the issue of whether the so-called “required records” doctrine can be employed by the government to require a taxpayer to produce foreign bank account records.  The specific question presented is as follows:

Whether the required records doctrine can be invoked to “override” or “supersede” the Fifth Amendment act-of-production privilege that concededly arises when, as here, the record-keeping requirement presumptively applies to all taxpayers and the compelled production of records would be testimonial and incriminatory.

We previously posted (see here) about the government’s use of the “required records” doctrine as part of its crackdown on offshore tax evasion through the use of secret foreign bank accounts. 

On Monday, May 13, 2013, the Supreme Court is expected to announce its decision as to whether cert will be granted.  Stay tuned.


SDNY Issues Latest Required Records Decision

The Honorable William H. Pauley III of the United States District Court for the Southern District of New York has issued the latest opinion applying the “Required Records Doctrine” in the context of a foreign bank account case.  See In re Various Grand Jury Subpoenas, No. 12 Misc. 381 (S.D.N.Y. Feb. 19, 2013) (Bloomberg article here).  In that case, the government caused grand jury subpoenas to be served on a number of individuals requiring production of foreign bank account records.  The taxpayers resisted production of the records, asserting the act of production privilege against self-incrimination under the Fifth Amendment.  The government, in response, argued that the Required Records Doctrine applied and precluded any Fifth Amendment assertion.  The district court agreed with the government, finding that the Required Records doctrine applied and ordered the taxpayers to comply with the subpoenas.  In doing so, the SDNY has joined a growing number of federal courts which hold that foreign bank account records required to be maintained under the Bank Secrecy Act are subject to the “Required Records” doctrine.  To date, the Fifth, Seventh, Ninth, and Eleventh Circuits have ruled uniformly on this issue in the government’s favor.  While these decisions greatly assist the government in its continuing crackdown on offshore tax evasion, the taxpayer in the Seventh Circuit case has filed a petition for a writ of certiorari in the Supreme Court, and it remains to be seen if the high court will review this controversial area of the law.