The opinion of the court was delivered by: MADDEN
This is a proceeding to enforce a summons requiring the production of certain documents for examination by the Bureau of Internal Revenue, pursuant to 26 U.S.C.A. §§ 7602 and 7604.
The facts are not in dispute and are, as follows: On October 13, 1958, one Henry T. Wacker, a Special Agent of the Internal Revenue Service, served a Director's Summons upon Joseph Tomaselli, a member of the New Jersey Bar and practitioner in this Court, directing him to appear at the office of the Director of Internal Revenue at Camden, New Jersey, and to produce all the work papers in his possession prepared by Domenick D. Joseph, a Certified Public Accountant, in connection with the preparation of the 1956 and 1957 Federal Income Tax Returns of Boccuto Motor Freight, Inc., a corporation, and Thomas and Delilah Boccuto, hereinafter called the taxpayers.
Domenick D. Joseph, hereinafter referred to as Joseph, has been engaged by the taxpayers for the past several years as their accountant. In the course of such employment he had received from the taxpayers a large quantity of files, records and documents. He also had prepared a number of work papers relating to the aforesaid documents and to information given to him from time to time by the taxpayers. It is these work papers around which this dispute evolves.
Acting upon the advice of counsel, the taxpayers instructed Joseph to turn over to their counsel, Joseph Tomaselli, Esquire, certain papers, including the work papers prepared by Joseph. Accordingly, Joseph turned the same over to Tomaselli, as instructed, and the latter was in possession of them when he was served with the subpoena calling for their production.
Thereafter, the United States Attorney presented a petition to this Court seeking an order directing Tomaselli to comply with the summons. An order to show cause was issued by the Court and on the return day an affidavit was filed herein by Joseph, the accountant, wherein he concludes:
'* * * In accordance with these instructions, I did turn over the work papers of these taxpayers to their counsel, Joseph Tomaselli, with no intention of retention or any title or belief that I can get them back.'
It is the position of Tomaselli that the work papers prepared by the accountant, Joseph, for the taxpayers (corporate and individual) and turned over by the accountant to him as counsel for the taxpayers are within the privilege against self-incrimination and that counsel could decline to disclose the contents thereof or produce them for inspection. As authority to substantiate this position, Tomaselli relies entirely upon the opinion of Judge Murphy in the Application of House, D.C.N.D.Cal., 144 F.Supp. 95, which holds to that effect regarding the work papers of an accountant relating to tax return of an individual taxpayer.
At the outset it should be noted that the Court feels there is no merit to the position of Tomaselli regarding the work papers relating to the tax return of the corporation, Boccuto Motor Freight, Inc. Corporations as such are guaranteed no protection under the Fifth Amendment. In United States v. White, 1944, 322 U.S. 694, 64 S. Ct. 1248, 88 L. Ed. 1542, the Supreme Court held that the privilege against self-incrimination was to be limited to its historic function of protecting only natural persons from compulsory incrimination through their own testimony or personal records. It could not protect a corporation or an organization.
The issue concerning Tomaselli's refusal to produce the work papers regarding the individuals' returns presents a much more difficult problem to the Court for, as has been stated, Tomaselli relies heavily upon Judge Murphy's decision in the House case, supra, which appears to be on 'all fours' with the facts here.
It should be borne in mind, first, that while the United States Attorney, for his own reasons, has entitled the petition herein in the name of the taxpayers they actually are not, as yet, parties to the cause, and, secondly, that while Tomaselli has stated in his memorandum, 'Taxpayers * * * are under investigation by the government on criminal charges of tax evasion,' there is nothing before the Court whereby it can determine whether the inquiry by the Special Agent is of a civil or criminal nature, or both.
Counsel in this matter have cited no cases from this Circuit to assist the Court and although the opinion of Judge Murphy in the House case, supra, creates a great impact upon the Court, this Court most respectfully feels that it must disagree with the conclusions therein reached because it is felt that the opposite conclusion is indicated by numerous decisions in various circuits.
In Rogers v. United States, 1950, 340 U.S. 367, 371, 71 S. Ct. 438, 440, 95 L. Ed. 344, the Supreme Court stated:
'Furthermore, the decisions of this Court are explicit in holding that the privilege against self-incrimination 'is solely for the benefit of the witness,' and 'is ...