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Circuit court says search is unconstitutional, but IRS ignores that ruling

It's tax time so the U.S. Internal Revenue Service (IRS) is likely in the minds (and fears) of many.  The IRS is also on the mind of the American Civil Liberties Union (ACLU).

I. Big Brother is Watching Your Email 

The ACLU is currently fighting a battle with the IRS over warrantless email snooping.  The IRS is reportedly regularly going to internet service providers and demanding their customers’ older emails -- and it's often getting the information.
 
The debate starts with the Fourth Amendment of the U.S.'s most important governing document, the Constitution, which states:

The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.

U.S. Constitution
[Image Source: EL Civics]
 
That's seemingly an open and shut statement -- the police can't investigate a citizen without a warrant.  But in recent years the federal government -- including the IRS -- has been steadily chipping away at due process.

Gmail 
The IRS for much of last decade argued email was not Constitutionally protected.
[Image Source: CNN]

Back in 2009, the IRS was operating under the premise that there were no protections against email searches.  That protocol was affirmed by the “Search Warrant Handbook” from the IRS Criminal Tax Division’s Office of Chief Counsel, a document that the ACLU obtained via a Freedom of Information Action (FOIA) of 1966 (5 U.S.C. § 552) lawsuit.

II. A Policy of Warrantless Surveillance

The 2009 IRS handbook suggests "the Fourth Amendment does not protect communications held in electronic storage, such as email messages stored on a server, because internet users do not have a reasonable expectation of privacy in such communications."

A second document -- a 2010, a presentation by the IRS Office of Chief Counsel -- repeats this, stating that citizens have "no privacy expectation" when it comes to email and commenting, "[The] 4th Amendment Does Not Protect Emails Stored on Server."

Thus the IRS practiced a haphazard process of obtaining emails, only occasionally backing its demands with warrants (perhaps when it met with resistance from service firms).

IRS Building
The IRS claimed the Fourth Amendment didn't apply to email. [Image Source: Bloomberg]

The IRS policy was only slightly worse than the general government policy.  Back in 2009, the general federal investigative policy -- based on the Electronic Communications Privacy Act (ECPA) (18 U.S.C. § 119) -- was that unopened emails less than 180 days old required a warrant, but emails older than 180 days, or opened emails did not require a warrant for federal agents to obtain.

Of course the Fourth Amendment seemingly gave a far more explicit and stringent requirement, regardless of the shortcomings of the ECPA, so it seemed inevitable that the issue would be put to the test.  And it was. 

III. Sixth Circuit Ruling Deals a Blow to Practice, But IRS Resists Change

In 2010, the Sixth Circuit Court of Appeals decided a critical case on the topic of email privacy -- United States v. WarshakIn that case the Circuit Court -- which sets precedent for Kentucky, Michigan, Ohio, and Tennessee -- decided that federal agents must obtain a warrant to obtain any email regardless of the age or open status, due to the Fourth Amendment protections.

The big questions after the Sixth Circuit decision was when it would be appealed and whether federal investigative agencies would comply with it until the issue was settled at the Supreme Court level.  The ACLU requested information from the IRS, the U.S. Federal Bureau of Investigation, and U.S. Department of Justice.

The IRS was the first to respond back.  And its 247-page response made it clear that it was not necessarily abiding by the Sixth Circuit ruling and may still be snooping on email.  The IRS instead switched to the previous precedent -- the 180 day ECPA protocol.

Tax rate
The IRS's manual still suggests warrantless email grabs are okay, despite a Federal Circuit Court ruling that they are unconstitutional. [Image Source: Something Finance]

Internal memos reveal IRS legal counsels initially denied having heard of the Sixth Circuit opinion, and argued that the 180-day rule is current and universal.  But in 2011 they advised that it "would not be sensible" to read emails without warrant.  The agency lawyers warned that ISPs could fight the demands, citing the Sixth Circuit ruling, and that while the agency was confident it could win the information obtained would be "stale" by then.

However, the advisory was never made mandatory, so presumably some warrantless data requests occurred.  Such a possibility is reinforced by the fact that this year's Internal Revenue Manual, available on the IRS website still says that no warrant is required for emails older that 180 days old -- making no reference of the Sixth Circuit ruling or the internal discussion.

Source: ACLU



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IRS Is The Modern Day Gestapo
By Arsynic on 4/11/2013 3:35:58 PM , Rating: 5
The tax system is a set of laws in and of itself. If you don't pay a certain amount they have guns and can force you to do so. Government also uses taxes to regulate behavior and uses the IRS to enforce it.

We can abolish this corrupt and oppressive organization by going to a consumption tax and abolishing the IRS.

Now these fools will be in charge of making sure we have health insurance.




RE: IRS Is The Modern Day Gestapo
By Ammohunt on 4/11/13, Rating: 0
RE: IRS Is The Modern Day Gestapo
By Flunk on 4/11/2013 4:48:29 PM , Rating: 1
That ensures that the poor pay the same as the rich. Tell that to the man who makes $20,000/year. A gradually ramp-up makes much more sense, at least from a social responsibility perspective. There is a bare minimum cost required to servive and a totally flat tax ignores that.

I do agree that simplification is the way to go, however. Other than my multiple tiers we're pretty much on the same page.


RE: IRS Is The Modern Day Gestapo
By Ammohunt on 4/11/13, Rating: -1
RE: IRS Is The Modern Day Gestapo
By Schrag4 on 4/11/2013 6:20:13 PM , Rating: 5
You kinda lost me when you mentioned "social responsibility". I'll agree that there's a social responsibility to help those that cannot help themselves, but I would argue that MOST of the people receiving benefits from the govt without paying in do so by choice rather than necessity. You must also acknowledge that social responsibility involves able-bodied individuals producing more than they consume. Whatever happened to the whole notion of "ask not what your country can do for you..."?

IMO the main reason the "gradually ramp-up" system is flawed is because it allows the majority of voters to vote themselves goodies and also vote for higher tax rates for those relatively few who will pay for those goodies. If everyone had some skin in the game, even the man making $20k/year, there would be a lot less wasteful spending. Of course I'm a heartless bastard for expecting people to grow up, become adults, and start taking responsibility for their own lives.


RE: IRS Is The Modern Day Gestapo
By MadMan007 on 4/11/2013 10:10:55 PM , Rating: 2
You certainly could argue that, but it sounds like you're starting with a conclusion you like and working backwards from there. If you want to 'prove' your point you ought to have some data to back it up.


RE: IRS Is The Modern Day Gestapo
By Schrag4 on 4/12/2013 12:27:36 PM , Rating: 4
Stats like a 70% increase in food stamp enrollment since 2008 seem pretty significant to me. A drop in the labor force participation rate (albeit a small one) isn't a good sign either. And although it's somewhat anecdotal, you don't have to look very far to find people who take pride in gaming the system and getting by without having a job. Are these people socially responsible? Should they be allowed to vote for candidates who promise tax increases on earners so their benefits can stay in place or increase?


RE: IRS Is The Modern Day Gestapo
By wyrmslair on 4/11/2013 9:45:35 PM , Rating: 2
Actually, a flat with a minimum earning mark or credits for those in the lowest tiers makes more sense than gradual ramps. The the low earners invested in the system but with an acknowledgement that they are struggling more to get by than those at the top. Hell, I'd be happy with an abolishing the capital gains tax - make investors pay income tax just like the rest of us. It is a perfect example of using complicated tax code to give advantages to those who don't really need it. Those who have money to invest already have enough advantages as is obviated by the fact that they have the extra money to invest. Not that they should be penalized but they shouldn't be given more advantages than the man who is laboring (literally) to get by and keep food on his table just like the lazy who won't work don't deserve to get everything handed to them on a sliver platter just for reproducing.


RE: IRS Is The Modern Day Gestapo
By Manch on 4/12/2013 3:05:26 AM , Rating: 3
quote:
That ensures that the poor pay the same as the rich. Tell that to the man who makes $20,000/year.


No, with a flat tax, I would be paying about 3X as much as that guy.

If a man cant make a living off 20K then he's not doing it right.


By ClownPuncher on 4/12/2013 2:38:19 PM , Rating: 2
$20k a year isn't a living in the US.


RE: IRS Is The Modern Day Gestapo
By KCjoker on 4/12/2013 5:59:50 PM , Rating: 2
No it ensures that everyone pays the same % and it keeps those with great lawyers/accountants from dodging taxes. It also ensures that the lazy people have to start paying their FAIR SHARE of the services they use.


RE: IRS Is The Modern Day Gestapo
By TSS on 4/11/2013 4:58:09 PM , Rating: 5
Except that it doesn't work. Not in a situation where 95% of the country's wealth is held by the top 5% of it's people.

You'd have to set it at a low rate because the poor right now cannot afford to pay any taxes since they're laden by debt. So if you'd set it at 10% (which is much more then they pay now so it already influences the economy negatively) then the rich also pay 10%, which would be even less then they're paying now. Set it high, and 95% of the population can no longer afford to pay taxes at all.

A V.A.T. tax is a flat tax on one's income by the way, it's in percentages after all. You're not going to notice a 10% tax on that $1 bigmac. But the same 10% tax applies to that $25 million dollar yaght, which comes to $2,5 million in taxes that simply cannot be avoided other then not buying nice things - something the rich won't do.

Not that it really matters by the way, it's a debate of semantics at this point. There's no way tax revenues will increase significantly in the future, atleast not until the next depression is over.


RE: IRS Is The Modern Day Gestapo
By eldakka on 4/12/2013 2:51:48 AM , Rating: 2
quote:
Except that it doesn't work. Not in a situation where 95% of the country's wealth is held by the top 5% of it's people.


The problem is, those top 5% pay less tax than you'd expecrt based on their oncome/wealth. They can afford the complicated tax dodges, offshore accounts, expensive lawyers/tax experts, etc.

Often someone make $1m a year could be paying as much tax as someone making $100k through deductions and tax avoidance schemes.

So while they may have 95% of the wealth, they are not paying 95% of the taxes.

I would like to see 2 tax brackets. A 0% and a flat rate. AND there should be NO deductions. Nil, zero, zilch, nada deductions.

(warning, arbitrary numbers for illustration)

e.g. 0% to 20K
20% 20,001+


By HercDriver on 4/12/2013 10:09:52 AM , Rating: 3
I'm sorry, but this kind of ignorance requires a little education. I'm tired of hearing that "the rich don't pay their fair share" and "the top 1% makes XX% of the money, but they don't pay XX% of taxes". Unfortunately, this attitude is all too common, and is simply a matter of "parroting" lines from politicians, who are using class warfare to get themselves elected. All it takes is a little research on the IRS webiste to get the facts. Start here: http://www.irs.gov/file_source/pub/irs-soi/10in05t... This excel chart shows for the last 10 years (more charts are available) what the top 0.1%, 1%, 5%, 10%, 25%, and 50% of earners make, and how much taxes they pay. Acccording to the IRS (not the republican party, Hitler, or any other "Right winger, tea party activists") in 2010 the top 0.1% earned $742,989,000, or 9.24% of the nation's reported income. They also paid $169,734,000 in taxes, or 17.88% of all taxes. To counter your misinformed argument, the top 5% earned $2,716,199,000, or 33.78% of all income, and paid $560,649,000 in taxes, or 59.07% of all taxes. Please, eldakka, and all similarly misinformed people...go to the IRS website, yourself, and review the charts. STOP mindlessly believing the politics of division, and class warfare. The "RICH" pay MORE THAN THEIR "FAIR SHARE" of taxes!!! I also would urge you to read "Basic Economics" by Thomas Sowell, and actually any other book he has written. We, as a nation, need to move away from the class envy model of politics, and really try to fix our problems, without trying to blame everyone else.


RE: IRS Is The Modern Day Gestapo
By FITCamaro on 4/11/2013 10:51:23 PM , Rating: 2
We are the government. And we are coming for your money.


RE: IRS Is The Modern Day Gestapo
By MadMan007 on 4/12/2013 9:12:27 AM , Rating: 2
Fitting coming from you since you work for the VA. ;)


RE: IRS Is The Modern Day Gestapo
By Spookster on 4/12/2013 12:37:38 PM , Rating: 2
Resistance is futile!


encrypted email
By Yojimbo on 4/11/2013 3:37:47 PM , Rating: 2
Perhaps, if the IRS argument of citizens not having a reasonable expectation of privacy ends up winning in the courts, the public should demand from the isp's, or whomever the proper concerned parties would be, that all email be transmitted and stored in encrypted format. Under such a situation I don't see how the IRS argument could hold water. Of course if it already is the case that emails are transmitted and stored with encryption then I don't see how their argument can hold any water already.




RE: encrypted email
By amanojaku on 4/11/2013 3:44:31 PM , Rating: 2
Don't be stupid. If a government agency can circumvent your right to email privacy, then it will force mail providers to decrypt messages, as well.

Citizens should not feel the need to run and hide from an abusive government. We have privacy laws for a reason, and the government must respect those laws. End of discussion.


RE: encrypted email
By Ammohunt on 4/11/2013 4:24:30 PM , Rating: 1
quote:
We have privacy laws for a reason, and the government must respect those laws. End of discussion.


I LOLed!

There are three letter agencies that can suspend your rights to due process(read constitutionally guaranteed rights) right on the spot! you think compliance with privacy laws are a barrier to these agencies? puhlese...Wake up! before you won't be able to.


RE: encrypted email
By Flunk on 4/11/2013 4:44:51 PM , Rating: 2
But the providers would be unable to because they wouldn't have the private key. That's the whole point of encryption.

You are right that the people shouldn't have to worry about a government that abuses it's authority, but it seems that we're far from that ideal at this point.


RE: encrypted email
By Argon18 on 4/11/2013 3:54:10 PM , Rating: 2
Encryption is irrelevant, read the story again. This is about legal process and rights. The government isn't storming the building and seizing data by force. They're demanding it from the ISP's.


RE: encrypted email
By JediJeb on 4/11/2013 4:56:32 PM , Rating: 2
The way to slow the progress here is for someone whose email was read without a warrant needs to sue the email provider for invasion of privacy. If it is ruled that they had no basis for handing over the email without a warrant being issued to them, then to protect themselves from future liability they would be more reluctant to hand over emails, and the IRS would then be forced into obtaining warrants.

Wouldn't that be a nice court battle to watch, Google, AT&T, Verison, ect vs IRS. Corporate juggernauts versus government, and on this one I believe the corporate side could muster an overwhelming public support simply because they would be against the IRS which everyone loves to hate.


RE: encrypted email
By othercents on 4/11/2013 4:04:10 PM , Rating: 2
quote:
citizens not having a reasonable expectation of privacy

I don't see how the courts would believe that citizens would expect any less privacy from using cloud based services as they would from downloading the messages and storing them locally. This would be the same as if I stored my private documentation in a lock box at a bank.

However those who want more security could use private and secure email services. At this point privacy is an issue for anything stored in the cloud.


Abusive government
By 91TTZ on 4/11/2013 3:13:38 PM , Rating: 2
While the Constitution is very clear about what kind of protections the citizens have against the government, why is it that the government claims you have no rights regarding anything newer than the Constitution?

You don't have a right to drive a car, you don't have right to electronic information, phones can be wiretapped, etc.

In other words, the Founding Fathers saw that governments tend to become abusive over time and oppress their citizens, so they made a document spelling out the various protections that people have against their government. Yet over time even that became bastardized. The current government basically believes that anything new isn't covered by those protections.




RE: Abusive government
By marhuff55 on 4/13/2013 10:40:20 AM , Rating: 2
Why does the government make these claims? Easy, because nobody is willing to step up to the plate with a good lawyer by their side, and nail them before the Supreme Court for violating the Constitution. How many times since 2001 has the government been taken before the Court for violating the Constitution? Not many, if any at all. As long as the citizens are lax, or aren't willing to do anything about it, then don't expect the government to stop this any time soon. Does everyone have to lose every freedom they have before they step up to the plate? It's really beginning to look that way.


RE: Abusive government
By Reclaimer77 on 4/14/2013 10:55:00 AM , Rating: 2
The Supreme Court just ruled that it's Constitutional for the Government to require you to purchase a product, in this case health insurance. Basically handing the Federal Government broad mandate power over it's citizens in direct violation with the very essence of the Constitution.

So even if you GET your issue to the Supreme Court, they blow it half the time. Because the judges are activist's and pretty much vote down party lines.

There should be no such thing as a "Right wing" or "Left wing" Supreme Court justice. There should ONLY be strict Constitutionalists, because that's their damn job! Uphold the Constitution, not their ideology!


Jason Mick: Unethical Behavior
By Nitric_Acid on 4/12/2013 9:49:28 AM , Rating: 1
What I would really like to know is why you are writing these articles while you are working for another employer, using their office space, internet connection and computers. Daily Tech is not providing any compensation for the use of these facilities, so in essence, you are stealing. I would like to know if Daily Tech endorses this kind of unethical behavior.




RE: Jason Mick: Unethical Behavior
By wasteoid on 4/12/2013 5:28:03 PM , Rating: 2
You must work for DailyTech, or else you are a hypocrite.


Two systems
By Shadowself on 4/11/2013 3:28:26 PM , Rating: 2
There is the "normal", "regular" court system. Then there is the "Tax" court system.

The IRS barely acknowledges the existence of the regular court system (and, for the vast majority of situations, ignores their rulings) and fights to not have to follow the rulings of the tax court system.

I found this out almost 30 years ago when the IRS told me that a certain court ruling on what I was to do was, as far as the IRS was concerned, 100% irrelevant to what the IRS was going to *require* me to do. When I complained the IRS agent said that I could take it to Tax Court if I wanted, but the IRS would probably enforce its own way of doing things no matter what the Tax court said.

Why should this case be any different?




I love how there are...
By amanojaku on 4/11/2013 3:39:29 PM , Rating: 2
Different laws for electronic and physical practices. The IRS has no right to check your pockets, mail box, or office desk. Why does it think it has the right to scan your email? Email should be protected the same was as postal mail. It's a federal offense to read mail that isn't addressed to you. The IRS, or any government agency, should be held accountable for invasion of privacy.




In my email...
By Omega215D on 4/12/2013 12:24:47 AM , Rating: 2
Here are the contents:

I'm sorry, but I cannot divulge
information about that customer's secret illegal
account.

Oh, crap. I shouldn't have said he was a customer.
Oh, crap. I shouldn't have said it was a secret.
Oh, crap! I certainly shouldn't have said it was
illegal.

ah.... It's too hot today.




It's all connected
By Fidget on 4/12/2013 9:31:19 AM , Rating: 2
This is why the debate on gun control is important to take note of even if you don't own a gun. It's the same logic applied. "when the 2nd ammendment was written they only had single shot muskets and they could have never envisioned AR-15's therefore the 2nd amendment does not apply to acess to these weapons" Well...If you look at the 1st and 4th amemndment you can make the same argument because low and behold when they were written the founding fathers could have never envisioned the internet and email therefore why should they be protected? They only apply to hand written letters and what ever else they had at the time, right?




Just make laws...
By JonnyDough on 4/14/2013 2:26:26 PM , Rating: 2
to target cash businesses like strip clubs, so they actually pay tax and the whole money problem in the US is solved. Focus on crooks, and close loopholes for the rich.




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