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United States v. Cohen

February 18, 1959

UNITED STATES OF AMERICA, RUSSELL C. HARRINGTON, COMMISSIONER OF INTERNAL REVENUE,
v.
RAYMOND COHEN, LOCAL 107 HIGHWAY TRUCK DRIVERS AND HELPERS UNION, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA, APPELLANTS.



Author: Egan

Before GOODRICH and HASTIE, Circuit Judges, and EGAN, District Judge.

EGAN, District Judge.

This is an appeal from an order of the United States District Court for the Eastern District of Pennsylvania granting the Commissioner of Internal Revenue the right to inspect, examine, copy and photograph books and records of the defendant union and enjoining the union and the defendant, Cohen, secretarytreasurer, from accepting and removing the books and records from the custody of a Senate Committee having possession of them until further order of the Court.

Jurisdiction is based on Sections 7602, 26 U.S.C.A. and 7402(a), 26 U.S.C.A. of the Internal Revenue Code of 1954.*fn1

Pursuant to Section 7602 of the Code, the Commissioner, who was investigating the tax status of the union covering the period 1947 through 1957, served an administrative summons on the union by serving a copy thereof on the defendant, Cohen, requiring him to appear before an officer of the Internal Revenue Service at the United States Courthouse, Philadelphia, Pennsylvania, to give testimony relating to the tax liability of the union and to bring with him the books and records listed in the summons.

Cohen and the union did produce or make available to the Internal Revenue Service all the requested books and records which were then in his possession and explained that he could not produce those for the period January 1, 1950 through September 26, 1957, because they were then and still are in the possession of the Senate Select Committee on Improper Activities in the Labor or Management Field of the United States Senate (hereinafter called Senate Committee).*fn2

The union and Cohen were then advised by letter that the Commissioner would deem the summons sufficiently complied with if the union would issue a letter addressed to the Commissioner, or the Senate Committee, authorizing the delivery of the books and records to the Internal Revenue Service upon the termination of the Committee's use thereof. This the union and Cohen, acting by their counsel, respectfully declined to do in so many words, although their language is equivocal.

Thereafter the Commissioner caused this suit to be brought in the District Court to enforce compliance under the above provisions of the Internal Revenue Code.

The complaint recites the facts in substantially the same form as related above. The defendants accepted service, filed a joint answer and new matter in which they stated in paragraph 13, "Defendants have neither neglected nor refused to obey the summons heretofore issued. They have in fact expressed their willingness to comply when compliance becomes possible." A similar statement appears on page 5 of their brief on appeal.

The cause came on for hearing on complaint, answer and affidavits before the District Court on plaintiff's motion for a preliminary injunction. At the hearing before Judge Welsh, there was offered and received in evidence without objection, as plaintiff's exhibit # 3, a letter from United States Senator James L. McClellan, Chairman of the Senate Committee, addressed to Government's counsel, reading in pertinent part as follows:

"In reply to your letter of September 18, 1958 regarding pending proceedings to compel Mr. Raymond E. Cohen and Local 107 of the Teamsters to turn over to the Government certain of its books and records, you point out that Judge Welsh desires some indication from this Committee whether a ruling would be considered or interpreted as an interference with the proper functions of Congress.

"I deem it in the best interests of the rank and file members of this local, as well as in the best interests of the country, that the books and records of Local 107 be preserved intact and that the records now in the possession of the Committee be turned over to the Internal Revenue Service by order of the Court. Such ruling by the Court would be considered by the Committee Chairman clear cooperation between the Legislative, Executive and Judicial Branches of the Government and such ruling would, in the Chairman's opinion, in no wise impinge upon or interfere with the proper functions of Congress."

At the conclusion of the hearing, Judge Welsh entered an order which reads in pertinent part as follows:

"It is Therefore Ordered, pursuant to the authority granted to the Court by Sections 7402 and 7602 of Title 26, that the Internal Revenue Service shall have the authority and is hereby granted the right to examine, inspect, copy and photograph the books and records of Local 107, Highway Truck Drivers and Helpers Union, ...


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