USCA11 Case: 24-10311 Document: 51-1 Date Filed: 11/05/2024 Page: 1 of 7
[DO NOT PUBLISH]
In the United States Court of Appeals For the Eleventh Circuit
____________________
No. 24-10311 Non-Argument Calendar ____________________
UNITED STATES OF AMERICA, Petitioner-Appellee, versus BLAKE M. ADAMS,
Respondent-Appellant.
Appeal from the United States District Court for the Southern District of Florida D.C. Docket No. 0:23-cv-61499-DMM ____________________ USCA11 Case: 24-10311 Document: 51-1 Date Filed: 11/05/2024 Page: 2 of 7
2 Opinion of the Court 24-10311
Before NEWSOM, GRANT, and DUBINA, Circuit Judges. PER CURIAM: Appellant Blake Adams appeals pro se the district court’s or- der granting the government’s petition to enforce an Internal Rev- enue Service (“IRS”) summons issued to Adams as part of its inves- tigation to collect his unpaid federal tax liabilities. Adams argues that the district court erred in granting the petition because en- forcement of the summons violates his Fifth Amendment rights by requiring him to produce incriminating documents and infor- mation. He also asserts that the district court should have imposed sanctions on the IRS for omitting information regarding his iden- tity theft claim and the summons and levies the IRS had previously issued from its enforcement petition. After reviewing the record and reading the parties’ briefs, we affirm the district court’s order. I. We will not reverse an order enforcing an IRS summons un- less it is clearly erroneous. United States v. Medlin, 986 F.2d 463, 466 (11th Cir. 1993). Whether enforcement of a summons violates a taxpayer’s Fifth Amendment privilege against self-incrimination is a mixed question of law and fact. Id. We review a district court’s factual findings for clear error and its application of the law to those facts de novo. Id. “We review the denial of sanctions under Federal Rule of Civil Procedure 11 for abuse of discretion.” Thompson v. Relation- Serve Media, Inc., 610 F.3d 628, 636 (11th Cir. 2010). Pursuant to USCA11 Case: 24-10311 Document: 51-1 Date Filed: 11/05/2024 Page: 3 of 7
24-10311 Opinion of the Court 3
Rule 11, sanctions are “warranted when a party files a pleading that (1) has no reasonable factual basis; (2) is based on a legal theory that has no reasonable chance of success and that cannot be advanced as a reasonable argument to change existing law; and (3) is filed in bad faith for an improper purpose.” Baker v. Alderman, 158 F.3d 516, 524 (11th Cir. 1998). The “key to unlocking a court’s inherent power” to impose sanctions “is a finding of bad faith.” Barnes v. Dalton, 158 F.3d 1212, 1214 (11th Cir. 1998). A party demonstrates bad faith by knowingly or recklessly raising a frivolous argument, bringing a meritorious claim for the purposes of harassment, delay- ing or disrupting litigation, or hampering enforcement of a court order. Id. II. The IRS is authorized to issue summonses for various pur- poses, including those related to the collection of tax liabilities. United States v. Clarke, 573 U.S. 248, 249-50, 134 S. Ct. 2361, 2364-65 (2014) (quotation marks omitted) (citing 26 U.S.C. § 7602(a)). An IRS summons may require a taxpayer to produce documents re- lated to a tax inquiry. Id., 134 S. Ct. at 2364-65. This summons authority is for inquiry, not accusation. See United States v. Arthur Young & Co., 465 U.S. 805, 816, 104 S. Ct. 1495, 1502 (1984) (quota- tion marks omitted). If the person to whom the IRS issues a sum- mons fails to comply, the IRS may seek judicial enforcement by demonstrating that the investigation is being conducted for a legit- imate purpose, the information sought may be relevant to that in- vestigation, the information sought is not already in the IRS’s pos- session, and the administrative steps required by the Internal USCA11 Case: 24-10311 Document: 51-1 Date Filed: 11/05/2024 Page: 4 of 7
4 Opinion of the Court 24-10311
Revenue Code have been followed. United States v. Powell, 379 U.S. 48, 57-58, 85 S. Ct. 248, 255 (1964). The Fifth Amendment privilege against self-incrimination protects an individual from “being incriminated by his own com- pelled testimonial communications.” Fisher v. United States, 425 U.S. 391, 409, 96 S. Ct. 1569, 1580 (1976). Ordinarily, the privilege does not extend to documents, even if such documents “might in- criminate [a] taxpayer.” Id. at 409, 96 S. Ct. at 1580. However, the Fifth Amendment may apply to the act of producing documents when doing so involves testimonial self-incrimination. Id. at 411, 96 S. Ct. at 1581. Supplying documents in response to an IRS sum- mons can be communicative by implicitly admitting the existence and possession of certain records, but this admission does not con- stitute protected testimony when it is a “foregone conclusion” that only marginally contributes to the information the government al- ready possesses. Id. at 410-11, 96 S. Ct. at 1580-81. Additionally, an individual attempting to invoke the Fifth Amendment must “provide more than mere speculative, general- ized allegations of possible tax-related criminal prosecution” and demonstrate they are faced with “substantial and real hazards of self-incrimination.” United States v. Reis, 765 F.2d 1094, 1096 (11th Cir. 1985). “[T]he mere fact that evidence might be used against [a] taxpayer in a later criminal prosecution will not support a blanket claim of self-incrimination.” Id. The district court, not the tax- payer, must evaluate the reasonableness of the taxpayer’s claim of USCA11 Case: 24-10311 Document: 51-1 Date Filed: 11/05/2024 Page: 5 of 7
24-10311 Opinion of the Court 5
potential self-incrimination. United States v. Argomaniz, 925 F.2d 1349, 1355 (11th Cir. 1991). The record here demonstrates that the district court did not err by granting the IRS’s petition to enforce the IRS summons. The district court found that the IRS met its burden to obtain enforce- ment because it submitted two sworn declarations from the Reve- nue Officer investigating the case that set forth the necessary facts. See United States v. Medlin, 986 F.2d at 466 (noting that the IRS sat- isfies its “minimal burden” by presenting an affidavit of the IRS agent investigating the case). In addition, the record supports the district court’s finding that Adams failed to show that enforcement of the summons violated his Fifth Amendment rights. Adams failed to show that his act of producing the requested documents would involve a testimonial aspect and create a real and substantial risk of self-incrimination, which is necessary to trigger the protec- tions of the Fifth Amendment. The IRS issued the summons in a civil investigation, and it did not refer the matter to the Justice De- partment for criminal investigation.
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USCA11 Case: 24-10311 Document: 51-1 Date Filed: 11/05/2024 Page: 1 of 7
[DO NOT PUBLISH]
In the United States Court of Appeals For the Eleventh Circuit
____________________
No. 24-10311 Non-Argument Calendar ____________________
UNITED STATES OF AMERICA, Petitioner-Appellee, versus BLAKE M. ADAMS,
Respondent-Appellant.
Appeal from the United States District Court for the Southern District of Florida D.C. Docket No. 0:23-cv-61499-DMM ____________________ USCA11 Case: 24-10311 Document: 51-1 Date Filed: 11/05/2024 Page: 2 of 7
2 Opinion of the Court 24-10311
Before NEWSOM, GRANT, and DUBINA, Circuit Judges. PER CURIAM: Appellant Blake Adams appeals pro se the district court’s or- der granting the government’s petition to enforce an Internal Rev- enue Service (“IRS”) summons issued to Adams as part of its inves- tigation to collect his unpaid federal tax liabilities. Adams argues that the district court erred in granting the petition because en- forcement of the summons violates his Fifth Amendment rights by requiring him to produce incriminating documents and infor- mation. He also asserts that the district court should have imposed sanctions on the IRS for omitting information regarding his iden- tity theft claim and the summons and levies the IRS had previously issued from its enforcement petition. After reviewing the record and reading the parties’ briefs, we affirm the district court’s order. I. We will not reverse an order enforcing an IRS summons un- less it is clearly erroneous. United States v. Medlin, 986 F.2d 463, 466 (11th Cir. 1993). Whether enforcement of a summons violates a taxpayer’s Fifth Amendment privilege against self-incrimination is a mixed question of law and fact. Id. We review a district court’s factual findings for clear error and its application of the law to those facts de novo. Id. “We review the denial of sanctions under Federal Rule of Civil Procedure 11 for abuse of discretion.” Thompson v. Relation- Serve Media, Inc., 610 F.3d 628, 636 (11th Cir. 2010). Pursuant to USCA11 Case: 24-10311 Document: 51-1 Date Filed: 11/05/2024 Page: 3 of 7
24-10311 Opinion of the Court 3
Rule 11, sanctions are “warranted when a party files a pleading that (1) has no reasonable factual basis; (2) is based on a legal theory that has no reasonable chance of success and that cannot be advanced as a reasonable argument to change existing law; and (3) is filed in bad faith for an improper purpose.” Baker v. Alderman, 158 F.3d 516, 524 (11th Cir. 1998). The “key to unlocking a court’s inherent power” to impose sanctions “is a finding of bad faith.” Barnes v. Dalton, 158 F.3d 1212, 1214 (11th Cir. 1998). A party demonstrates bad faith by knowingly or recklessly raising a frivolous argument, bringing a meritorious claim for the purposes of harassment, delay- ing or disrupting litigation, or hampering enforcement of a court order. Id. II. The IRS is authorized to issue summonses for various pur- poses, including those related to the collection of tax liabilities. United States v. Clarke, 573 U.S. 248, 249-50, 134 S. Ct. 2361, 2364-65 (2014) (quotation marks omitted) (citing 26 U.S.C. § 7602(a)). An IRS summons may require a taxpayer to produce documents re- lated to a tax inquiry. Id., 134 S. Ct. at 2364-65. This summons authority is for inquiry, not accusation. See United States v. Arthur Young & Co., 465 U.S. 805, 816, 104 S. Ct. 1495, 1502 (1984) (quota- tion marks omitted). If the person to whom the IRS issues a sum- mons fails to comply, the IRS may seek judicial enforcement by demonstrating that the investigation is being conducted for a legit- imate purpose, the information sought may be relevant to that in- vestigation, the information sought is not already in the IRS’s pos- session, and the administrative steps required by the Internal USCA11 Case: 24-10311 Document: 51-1 Date Filed: 11/05/2024 Page: 4 of 7
4 Opinion of the Court 24-10311
Revenue Code have been followed. United States v. Powell, 379 U.S. 48, 57-58, 85 S. Ct. 248, 255 (1964). The Fifth Amendment privilege against self-incrimination protects an individual from “being incriminated by his own com- pelled testimonial communications.” Fisher v. United States, 425 U.S. 391, 409, 96 S. Ct. 1569, 1580 (1976). Ordinarily, the privilege does not extend to documents, even if such documents “might in- criminate [a] taxpayer.” Id. at 409, 96 S. Ct. at 1580. However, the Fifth Amendment may apply to the act of producing documents when doing so involves testimonial self-incrimination. Id. at 411, 96 S. Ct. at 1581. Supplying documents in response to an IRS sum- mons can be communicative by implicitly admitting the existence and possession of certain records, but this admission does not con- stitute protected testimony when it is a “foregone conclusion” that only marginally contributes to the information the government al- ready possesses. Id. at 410-11, 96 S. Ct. at 1580-81. Additionally, an individual attempting to invoke the Fifth Amendment must “provide more than mere speculative, general- ized allegations of possible tax-related criminal prosecution” and demonstrate they are faced with “substantial and real hazards of self-incrimination.” United States v. Reis, 765 F.2d 1094, 1096 (11th Cir. 1985). “[T]he mere fact that evidence might be used against [a] taxpayer in a later criminal prosecution will not support a blanket claim of self-incrimination.” Id. The district court, not the tax- payer, must evaluate the reasonableness of the taxpayer’s claim of USCA11 Case: 24-10311 Document: 51-1 Date Filed: 11/05/2024 Page: 5 of 7
24-10311 Opinion of the Court 5
potential self-incrimination. United States v. Argomaniz, 925 F.2d 1349, 1355 (11th Cir. 1991). The record here demonstrates that the district court did not err by granting the IRS’s petition to enforce the IRS summons. The district court found that the IRS met its burden to obtain enforce- ment because it submitted two sworn declarations from the Reve- nue Officer investigating the case that set forth the necessary facts. See United States v. Medlin, 986 F.2d at 466 (noting that the IRS sat- isfies its “minimal burden” by presenting an affidavit of the IRS agent investigating the case). In addition, the record supports the district court’s finding that Adams failed to show that enforcement of the summons violated his Fifth Amendment rights. Adams failed to show that his act of producing the requested documents would involve a testimonial aspect and create a real and substantial risk of self-incrimination, which is necessary to trigger the protec- tions of the Fifth Amendment. The IRS issued the summons in a civil investigation, and it did not refer the matter to the Justice De- partment for criminal investigation. The summons sought to de- termine Adams’s ability to pay tax liabilities he already owed for the years 2010-2015. As such, Adams fails to establish a Fifth Amendment claim because he cannot show that he had “reasona- ble cause to apprehend danger of criminal liability” from respond- ing to the summons. Id. at 1353. Accordingly, we affirm as to this issue. III. USCA11 Case: 24-10311 Document: 51-1 Date Filed: 11/05/2024 Page: 6 of 7
6 Opinion of the Court 24-10311
In a proceeding to enforce an IRS summons, overlap be- tween the information the IRS already possesses and the infor- mation requested in the summons will not bar enforcement if the summons is not harassing and the IRS does not possess the “bulk” of the information it is requesting in the summons. United States v. Davis, 636 F.2d 1028, 1038 (5th Cir. 1981). 1 Additionally, a dispute regarding an underlying tax liability will not prevent enforcement of a summons because “the validity of the assessment may not be challenged in a summons enforcement proceeding.” United States v. Morse, 532 F.3d 1130, 1132 (11th Cir. 2008). Adams requested the district court impose sanctions on the IRS because he claimed that the IRS engaged in deception by omit- ting from its enforcement petition his claim of identity theft and the IRS’s summons and levy notices to his financial institutions. However, the record does not support Adams’s contention and, in fact, demonstrates that the district court did not abuse its discretion by declining to impose sanctions. Adams’s claim of identity theft attacked the validity of his underlying tax assessments, which is not a defense a taxpayer can raise in a summons-enforcement proceed- ing. See Id. at 1132. Further, the IRS’s possession of some infor- mation about Adams’s finances provides no basis to deny enforce- ment of the summons. See Davis, 636 F.2d at 1037. Because infor- mation regarding Adams’s identity theft claim and the summons
1 In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), the
Eleventh Circuit adopted as binding precedent all decisions of the former Fifth Circuit handed down prior to October 1, 1981. USCA11 Case: 24-10311 Document: 51-1 Date Filed: 11/05/2024 Page: 7 of 7
24-10311 Opinion of the Court 7
and levies the IRS had previously issued was immaterial to the sum- mons enforcement proceeding, the IRS’s omission of such infor- mation from its petition did not constitute bad faith. Thus, we af- firm as to this issue. Accordingly, based on the aforementioned reasons, we af- firm the district court’s order granting the IRS’s petition to enforce an IRS summons. AFFIRMED.