TP Petitions The Supremes

[The Observer]

DAVID J. EDWARDS,
Petitioner,
v.
THE UNITED STATES OF AMERICA,
Respondent.

Release Date: OCTOBER 17, 2011

IN THE
SUPREME COURT OF THE UNITED STATES

On Petition For A Writ Of Certiorari
To The United States Court Of Appeals
For The Ninth Circuit

PETITION FOR WRIT OF CERTIORARI

David J. Edwards
In Propria Persona
(Defendant Below)
3824 East Indianapolis
Fresno, California 93726
(559) 221 7050

Petitioner in Pro Per

Questions Presented

1. Does the statutorily extended evidentiary privilege grated to relationships between taxpayers and their non-attorney tax advisers under 26 U.S.C. section 7525 apply to grand jury proceedings convened for the purpose of obtaining a criminal indictment for a violation of the Internal Revenue Code?

2. Should the common law attorney client privilege be extended to confidential communications between a taxpayer and his attorney where those communications were privileged under the provisions of 26 U.S.C. section 7525 when made during a non-criminal tax proceeding before the Commissioner of the Internal Revenue Service if, after the communications have been made, the United States commences criminal proceedings against the taxpayer?

PARTIES TO THE PROCEEDINGS

The Petitioner is David J. Edwards, an individual who was the defendant below. The Respondent is the United States of America who was the plaintiff below.

CORPORATE DISCLOSURE STATEMENT

Petitioner David J. Edwards is an individual, making this petition on behalf of no corporate entity.

TABLE OF CONTENTS

QUESTIONS PRESENTED

PARTIES TO THE PROCEEDING

CORPORATE DISCLOSURE STATEMENT

TABLE OF CONTENTS

TABLE OF AUTHORITIES

OPINIONS BELOW

JURISDICTION

STATUTE UNDER CONSIDERATION

STATEMENT OF THE CASE

NECESSITY FOR REVIEW BY CERTIORARI

TABLE OF AUTHORITIES

STATUTES

8 U.S.C. section 514

18 U.S.C. section 3231

18 U.S.C. section 3232

26 U.S.C. section 7201

26 U.S.C. section 7212

26 U.S.C. section 7525

28 U.S.C. section 1257

28 U.S.C. section 1291

RULES

Federal Rules of Criminal Procedure, Rule 18

OPINIONS BELOW

The United States Court of Appeals for the Ninth Circuit denied, without opinion, Edwards's request for rehearing en banc on July 19, 2011. This denial appears in the Appendix to this petition, App. at p. 137.

The United States Court of Appeals for the Ninth Circuit affirmed, by unpublished written majority opinion, Smith, Circuit Judge specially concurring, the judgment of conviction against defendant entered by the United States District Court, Eastern District of California on April 27, 2010. This opinion and order appears in the Appendix to this petition, App. at p. 134.

JURISDICTION

A. Original Jurisdiction in the District Court

This action originated by indictment, filed in the United States District Court, Eastern District of California on February 9, 2006 alleging, inter alia, that between January 1, 1999 and November 1, 2005 in the County of Fresno, State and Eastern District of California, Defendant and Appellant David J. Edwards "Edwards") violated 26 U.S.C. section 7201: Tax Evasion, three counts; 8 U.S.C. section 514 Presenting Fictitious instrument purporting to be actual security of the United States of America, two counts and 26 U.S.C. section 7212(a) endeavoring to impede the administration of the internal revenue laws, one count. (App. at p. 118.) As such, the District Court was vested with original jurisdiction over these matters pursuant to 18 U.S.C. section 3231. In that the indictment alleged that Edwards committed some or all of the acts constituting the violations within the County Fresno, State and Eastern District of California, the United States District Court for the Eastern District of California was the proper venue for the action pursuant to the provisions of 18 U.S.C. section 3232 and Federal Rules of Criminal Procedure, Rule 18.

B. Jurisdiction of the Court of Appeals

Before the United States Court of Appeals for the Ninth Circuit, this matter presented a direct appeal from a final judgment of conviction and sentence entered in the United States District Court, Eastern District of California on April 26, 2010. Accordingly, appellate jurisdiction was vested in that court pursuant to the provisions of 28 U.S.C. section 1291.

C. Jurisdiction on Certiorari

This petition concerns a request for review of the decision of the United States Court of Appeals for the Ninth Circuit in a criminal matter. It is filed by the defendant in that matter. Accordingly, this court has jurisdiction to issue the writ of certiorari under the provisions of 28 U.S.C. section 1257.

STATUTE UNDER CONSIDERATION

Title 26 United States Code:

section 7525. Confidentiality privileges relating
to taxpayer communications

(a) Uniform application to taxpayer communications
with federally authorized practitioners

(1) General rule

With respect to tax advice, the same common law protections
of confidentiality which apply to a communication between
taxpayer and an attorney shall also apply to a communication
between a taxpayer and any federally authorized tax
practitioner to the extent the communication would
be considered a privileged communication if it were
between taxpayer and an attorney.

(2) Limitations

Paragraph (1) may only be asserted in --

(A) any noncriminal tax matter before the Internal
Revenue Service; and

(B) any noncriminal tax proceeding in Federal court
brought by or against the United States.

(3) Definitions

For purposes of this subsection --

(A) Federally authorized tax practitioner

The term "federally authorized tax practitioner"
means individual who is authorized under Federal
law to practice before the Internal Revenue Service
if such practice is subject to Federal regulation
under section 330 of title 31, United States Code.

(B) Tax advice

The term "tax advice" means advice given by an individual
with respect to a matter which is within the scope
of the individual's authority to practice described
in subparagraph (A).

(b) Section not to apply to communications regarding
tax shelters

The privilege under subsection (a) shall not apply
to any written communication which is --

(1) between a federally authorized tax practitioner
and --

(A) any person,

(B) any director, officer, employee, agent, or representative
of the person, or

(C) any other person holding a capital or profits
interest in the person, and

(2) in connection with the promotion of the direct
or indirect participation of the person in any tax
shelter (as defined in section 6662(d)(2)(C)(ii)).

STATEMENT OF THE CASE

On January 26, 2006 the United States of America appeared in Fresno, California before the grand jury convened by the United States District Court, Eastern District of California and then and there offered the testimony of Brian Applegate, a Special Agent with the Internal Revenue Service Criminal Investigation Division. (App. at pp. 1 - 2.) The purpose of this appearance was to inform the grand jury of the legal premises for an indictment to be presented to them, perhaps at the following session. (App. at. p. 2.) During the presentation, James Ledbetter, ("Ledbetter") an Enrolled Agent, certified to represent taxpayers administratively through the Internal Revenue Service Appeals process, but not into Tax Court. (App. at pp. 40 - 54.) In the course of his practice as an enrolled agent, Ledbetter advised Edwards on tax matters from approximately late January 2003 through March 2003. (App. at p. 42.) Ledbetter testified, among other things, as to the contents of communications -- written and oral -- between himself and Edwards during the course of Ledbetter's representation of Edwards concerning the use of Bills of Exchange to pay income tax obligations as well as concerning the use of trusts Ledbetter believed were illegal. (App. at pp. 44 - 49.)

The Grand Jury returned a True Bill of Indictment against David Edwards and The United States of America filed that indictment on February 9, 2006 in the United States District Court, Eastern District of California alleging that between January 1, 1999 and November 1, 2005, Edwards did corruptly endeavor to impede the due administration of the internal revenue laws by: submitting false documents to the internal revenue service which he alleged to be actual monetary instruments in an attempt to pay his federal income taxes; by filing fraudulent UCC1 financing statements attempting to create a liability that took priority over Internal Revenue Claims and by having trusts hold his assets in an attempt to conceal from the internal revenue service the nature and extent of his assets; by sending the internal revenue service frivolous correspondence and documents and attempted to intimidate financial institutions to prevent them from complying with internal revenue service summonses in violation of Title 26 United States Code, section 7212; The indictment alleged in Count II that Edwards wilfully attempted to evade and defeat a large part of the income taxes due and owing by him to the united states of america for the calendar year 1998 in the approximate amount of $ 55,974 by submitting "Bills of Exchange" and other documents in lieu of payment and by concealing or attempting to conceal from the internal revenue service the nature, location, and extent of his assets by attempting to place funds and property beyond the reach of service of process and/or by placing funds and property in the names of nominees in violation of title 26 United States Code section 7201; The indictment alleged in Count III that Edwards wilfully attempted to evade and defeat a large part of the income taxes due and owing by him to the united states of america for the calendar year 1999 in the approximate amount of $ 205,456 by submitting "Bills of Exchange" and other documents in lieu of payment and by concealing or attempting to conceal from the internal revenue service the nature, location, and extent of his assets by attempting to place funds and property beyond the reach of service of process and/or by placing funds and property in the names of nominees in violation of title 26 United States Code section 7201; The indictment alleged in Count IV that Edwards wilfully attempted to evade and defeat a large part of the income taxes due and owing by him to the united states of america for the calendar year 2000 in the approximate amount of $ 148,291 by submitting "Bills of Exchange" and other documents in lieu of payment and by concealing or attempting to conceal from the internal revenue service the nature, location, and extent of his assets by attempting to place funds and property beyond the reach of service of process and/or by placing funds and property in the names of nominees in violation of title 26 United States Code section 7201; The indictment alleged in Count V that Edwards, with the intent to defraud, passed, uttered, or offered within the United States a false or fictitious instrument, document, or other item appearing, representing, purporting, or contriving through scheme or artifice to be an actual security or financial instrument issued under the authority of the United States, to wit: a "Bill of Exchange" dated January 4, 2002 in the approximate amount of $ 124,908.10 to the Internal Revenue Service, Fresno, California in violation of Title 18 United States Code section 514(a)(2); and in Count VI that Edwards, with the intent to defraud, passed, uttered, or offered within the United States a false or fictitious instrument, document, or other item appearing, representing, purporting, or contriving through scheme or artifice to be an actual security or financial instrument issued under the authority of the United States, to wit: a "Bill of Exchange" dated February 26, 2003 in the approximate amount of $ 209,031.90 to the Internal Revenue Service, Fresno, California in violation of Title 18 United States Code section 514(a)(2). (App. at pp. 118 - 123.)

On March 18, 2008. Edwards moved the District Court for an order suppressing Ledbetter's grand jury testimony and to dismiss the indictment on the basis that offering such testimony violated Edwards' privilege of confidentiality of communications between himself and his federally authorized tax practitioner as that privilege is defined by 26 U.S.C. section 7525 and by extension of the privilege afforded by Rule 501 of the Federal Rules of Evidence. The United States Opposed the motion and on April 21, 2008, after hearing, the District Court denied the motion. (App. at pp. 124 - 125.)

On June 23, 2008, Edwards moved the court for reconsideration of its denial of his motion to suppress Ledbetter's grand jury testimony and to dismiss the indictment denied by the district court on April 21, 2008. The motion to reconsider was opposed by the United States and on June 30, 2008, the District Court after hearing granted defendant's motion for reconsideration and again denied the motion to suppress and dismiss the grand jury indictment. Edwards filed a petition to file an interlocutory appeal of the denial in this court on July 11, 2008 and on September 10, 2008, the United States Court of Appeals for the Ninth Circuit denied the Petition for interlocutory appeal upon the grounds that it had not been certified by the District Court as meeting the conditions required for interlocutory appeal. (App. at p. 126.) On October 21, 2008, the District Court amended its order denying Edwards' motion to suppress Leadbetter's testimony to the grand jury and to dismiss the grand jury indictment to make the findings required by Federal Rules of Appellate Procedure, Rule 5(a)(3) and certified the matter as meeting the conditions required for interlocutory appeal. (App. at pp. 124 - 125.)

Edwards again petitioned the United States Court of Appeals for the Ninth Circuit for permission to file an interlocutory appeal of the District Court's denial and on January 23, 2009, that court denied Edwards' petition to file interlocutory appeal on the basis that 28 U.S.C. section 1292(b) authorized the district court to certify a matter for interlocutory appeal only in civil cases. (App. at p. 127.)

On January 11, 2010, Edwards entered into a plea agreement with the United States wherein he moved to change his plea in Count III of the indictment to Guilty in exchange for the United States' agreement to dismiss the remaining counts of the indictment, to make certain lenient recommendations as to sentencing, and to stipulate that edwards was free to make a direct appeal to this court of the District Court's denial of his motion to suppress Ledbetter's Grand Jury testimony and to dismiss the indictment.

On January 11, 2010, acting upon that plea agreement, Edwards moved the District Court to change his plea on Count III of the indictment to Guilty. The District Court granted the motion.

On April 26, 2010, the District Court entered judgment of conviction on Edwards' guilty plea to Count III of the indictment, pronounced sentence which included twenty one months incarceration by the United States Bureau of Prisons and The United States moved to dismiss the remaining counts of the indictment, the District Court granted that motion. (App. at pp. 128 - 133.)

On April 26, 2010, Edwards timely filed his notice of appeal of the Judgment of conviction in the Court of Appeals for the Ninth Circuit.

On May 3, 2011, the Court of Appeals for the Ninth Circuit rendered its judgment affirming the conviction on basis that the Grand Jury Proceeding, while non criminal, was not a "tax proceeding" before the District Court and therefore the confidentiality privilege extended to tax advice given by non-attorney tax representatives could not be asserted therein. In addition, the Court of Appeals ruled, any error in allowing the introduction of testimony from non the attorney taxpayer as to the tax advice given would be harmless beyond a reasonable doubt because the testimony of the Internal Revenue Service Criminal Investigator was sufficient to justify the indictment in all respects. (App. at pp. 134 - 136.)

On July 20, 2011, the Court of Appeals for the Ninth Circuit denied petitioner's motion for a rehearing en banc (App. at p. 137.)

NECESSITY FOR REVIEW BY CERTIORARI

Petitioner seeks review in this matter under subsection (c) of Rule 10 of the Rules of the United States Supreme Court in that a United States Court of Appeals has decided an important question of federal law that has not been, but should be, settled by this Court.

In particular, the potential impact of this matter is profound and nationwide in its scope. The United States Congress has inadvertently created a trap for the unwary taxpayer by granting a statutory privilege that seems to give protection from disclosures to non attorney tax advisors under certain circumstances, but prohibits assertion of that privilege if the "worst case scenario" should arise. That is, when the taxpayer is facing charges for allegations of criminal conduct, even if the taxpayer was not aware that such allegations might be a possible consequence of the matter for which tax advice is being sought.

Unless this situation is judicially remedied by this Court, it is entirely possible that the entire privilege will be rendered useless because no prudent taxpayer could ever seek the advice of a non-attorney tax adviser. Any taxpayer seeking such advice would do so at his or her extreme peril that the situation being disclosed may have criminal elements that would cause the tax adviser to be a witness to the disclosure in a subsequent criminal proceeding that was never contemplated by the taxpayer or the adviser before the disclosure.

This court's review of this issue is essential to protect the privilege that Congress enacted in this situation.

DATED: December 18, 2011

Respectfully submitted,

David J. Edwards,
In Propria Persona.

[Number Six]

I have never heard a Supreme Court justice, congressman, senator or president address sovereign, tax protester, or other similar issue, and I have watched a fair amount of news and CSpan over the years. It seems they have adopted the view that if they ignore it, it will just go away. Not true.

[JamesVincent]

I have never heard a Supreme Court justice, congressman, senator or president address sovereign, tax protester, or other similar issue, and I have watched a fair amount of news and CSpan over the years. It seems they have adopted the view that if they ignore it, it will just go away. Not true.

Maybe they figure if they ignore it long enough theyll all die of old age. And it will be someone elses problem.

[Quixote]

I have never heard a Supreme Court justice, congressman, senator or president address sovereign, tax protester, or other similar issue, and I have watched a fair amount of news and CSpan over the years. It seems they have adopted the view that if they ignore it, it will just go away. Not true.

The issues in the case are not really sovereign or TP issues. They seem to be valid concerns. Ideally, you would want people to run their crazy ideas past professionals who might be able to dissuade them from proceeding. If those discussions are not privileged, that could discourage the client from frankly discussing his plans.

But the SC will not and should not issue a writ in this case. First, there is no split among the circuits. Second, as the 9th Circuit pointed out, the EA's testimony was just supplemental to the CI special agent's testimony, which was sufficient to get the indictment. If the SC wants to extend attorney client privilege to EA client discussions they will wait for a cleaner case.

[LPC]

This seems to be the Circuit Court opinion being appealed from:

United States v. David J. Edwards, No. 10-10227 (9th Cir. 5/3/2011).

UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
DAVID J. EDWARDS
Defendant-Applellant.

NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

MAY 03 2011

D.C. No. 1:06-cr-00049-LJO-1

MEMORANDUM*

Appeal from the United States District Court
for the Eastern District of California
Lawrence J. O'Neill, District Judge, Presiding

Argued and Submitted April 15, 2011
San Francisco, California

Before: NOONAN and N.R. SMITH, Circuit Judges, and BLOCK, Senior District Judge.**

David J. Edwards ("Edwards") appeals the district court's denial of his motion to suppress grand jury testimony and dismiss the indictment. We have jurisdiction under 28 U.S.C. § 1291, and we affirm.

Assuming, without deciding, that the district court erred in denying Edwards's motion to suppress Ledbetter's grand jury testimony, we conclude that the error was harmless. "[A]s a general matter, a district court may not dismiss an indictment for errors in grand jury proceedings unless such errors prejudiced the defendants." Bank of Nova Scotia v. United States, 487 U.S. 250, 254 (1988). Since the testimony and documentary evidence that Special Agent Brian Applegate presented to the grand jury were clearly sufficient to support the indictment, the admission of Ledbetter's testimony did not '"substantially [influence] the grand jury's decision to indict'" and the district court properly declined to dismiss the indictment. See id. at 256 (quoting United States v. Mechanik, 475 U.S. 66, 78 (1986) (O'Connor, J., concurring)).

AFFIRMED.

Judge N.R. Smith concurring,

The district court did not err in refusing to dismiss the indictment or suppress Ledbetter's testimony, because there was no violation of the tax practitioner privilege. Congress specified that the privilege "may only be asserted in -- (A) any noncriminal tax matter before the Internal Revenue Service; and (B) any noncriminal -- tax proceeding in Federal court brought by or against the United States." 26 U.S.C. § 7525(a)(2) (emphases added). It is obvious that a grand jury hearing is not a matter before the Internal Revenue Service. Edwards conceded at oral argument that the grand jury hearing was not a tax proceeding in Federal court. The privilege was therefore inapplicable.

There is no reason for the court to extend a common-law privilege in this case. Congress has expressly provided that a tax practitioner-client privilege should only apply to a "noncriminal tax matter before the Internal Revenue Service" or a "noncriminal tax proceeding in Federal court." Id.; Fed. R. Evid. 501 ("[T]he privilege of a witness . . . shall be governed by the principles of the common law," "[e]xcept as otherwise . . . provided by Act of Congress.")

FOOTNOTES

* This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3.

** The Honorable Frederic Block, Senior United States District Judge for the Eastern District of New York, sitting by designation.

END OF FOOTNOTES

[Famspear]

From the argument by David J. Edwards:

The United States Congress has inadvertently created a trap for the unwary taxpayer by granting a statutory privilege [under Internal Revenue Code section 7525] that seems to give protection from disclosures to non attorney tax advisors under certain circumstances, but prohibits assertion of that privilege if the "worst case scenario" should arise.

That is correct. The section 7525 privilege does protect certain disclosures to non-attorney tax advisors under certain circumstances. And, because of the language in the statute limiting its applicability, the privilege does not apply if the "worst case scenario" (criminal prosecution) should arise.

But that was the decision Congress made in enacting the statute. Edwards is asking that the courts extend the scope of the section 7525 privilege under the theory that the courts should decide that Congress was unwise to impose the limits. He is asking the courts to extend the scope of the privilege.

Edwards continues:

That is, when the taxpayer is facing charges for allegations of criminal conduct, even if the taxpayer was not aware that such allegations might be a possible consequence of the matter for which tax advice is being sought.

Again, Edwards is asking the courts to second-guess the Congress, and to extend the scope of the privilege to areas where the Congress, by expressly limiting its scope, clearly did not want the privilege to apply.

Edwards continues:

Unless this situation is judicially remedied by this Court, it is entirely possible that the entire privilege will be rendered useless because no prudent taxpayer could ever seek the advice of a non-attorney tax adviser. Any taxpayer seeking such advice would do so at his or her extreme peril that the situation being disclosed may have criminal elements that would cause the tax adviser to be a witness to the disclosure in a subsequent criminal proceeding that was never contemplated by the taxpayer or the adviser before the disclosure.

I don't buy it. The privilege, arguably at least, was of limited usefulness on the day the statute was enacted -- but this situation is a result of a conscious decision that the Congress made in enacting the statute. In effect, Edwards is saying that he believes the limitations posed by Congress were unwise, and that he wants to courts to correct the "problem."

I see no evidence that, after the passage of section 7525, anyone at all has been less likely to confide in a non-attorney tax adviser (advisor) as a result of the enactment of that law. Edwards is using the fallacy of the "imaginary horrible." In effect, Edwards did something foolish in confiding something to an Enrolled Agent, and Edwards is projecting his own foolishness onto the population at large.

I believe that the average person has some vague sense, when he or she talks with a priest or a minister or rabbi, or with an attorney or CPA, or with a physician, that there is some sort of rule about the protection of confidentiality. However, the average person simply does not know the details of the scope and limitation of the protection. The argument that Congress, in enacting section 7525, somehow "inadvertently created a trap for the unwary taxpayer", is not persuasive, in my view.

[Gregg]

In effect, Edwards did something foolish in confiding something to an Enrolled Agent, and Edwards is projecting his own foolishness onto the population at large.

Not really, the foolish thing he did was, after getting the answer he didn't want, he ignored it and went full retard anyhow. Except to the extent that this fact being in evidence kind of ruined his Cheek defense, talking to an Enrolled Agent was a good idea.

In fact, his argument should be rebutted with the statement that if you get advice from an expert, it might be a good idea to listen to it next time.

[LPC]

Cert. denied. Edwards v. United States, Sup. Ct. Dkt. No. 11-827 (2/21/2012).