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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.

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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RE: IRS Is The Modern Day Gestapo
By Ammohunt on 4/11/2013 4:29:02 PM , Rating: 0
We can abolish this corrupt and oppressive organization by going to a consumption tax and abolishing the IRS.

a V.A.T. tax? no thanks! that's the worst idea same with the fair tax garbage.

Flat rate tax on income period done and done won't need the thousand of IRS lawyers to figure out single flat rate.

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
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
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: 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.

"So, I think the same thing of the music industry. They can't say that they're losing money, you know what I'm saying. They just probably don't have the same surplus that they had." -- Wu-Tang Clan founder RZA

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