FOR PUBLISHING

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

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UNITED STATES OF AMERICA,.......................... )

Petitioners-Appellants,................. ) .........................No. 95-55609

...........................................)..............................D.C. No

V......................................................................)...................... CV 93-5736 SVW

LOREN C. TROESCHER,..................................... )............................ OPINION

___________________Respondent-Appellee.........)

Appeal from the United States District Court

for the Central District of California

Stephen V. Wilson, District Judge, Presiding

Argued and Submitted

August 7, 1996-Pasadena, California

Filed November 7, 1996

Before: Stephen Reinhardt, Cynthia Holcomb Hall, and

Edward Leavy, Circuit Judges.

Opinion by Judge Reinhardt

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SUMMARY

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Tax/Litigation & Procedure

The court of appeals vacated an order of the district court. The court held that the fifth Amendment privilege against self-incrimination applies when a taxpayer refuses to answer questions by the IRS or to produce documents out of fear of prosecution for a tax crime. . . . . . . . . . . . . . . . . . . . . . . . . .14677

14678 __________________________________________UNITED STATES v. TROESCHER

When appellee Internal Revenue Service (IRS) issued a summons to answer questions and produce documents, appellant Loren Troescher resisted. The IRS sought an order to compel his compliance. Troescher invoked his Fifth Amendment privilege against self-incrimination, asserting that for him to disclose the information sought by the IRS would expose him to prosecution for a tax crime.

The district court rejected Troescher's claim of Fifth Amendment privilege, concluding that under binding Ninth Circuit precedent, a "tax-crimes" exception required him to show that he feared prosecution for a non-tax crime in order for the privilege to apply.

On Troescher's appeal from the district court's order compelling him to answer the questions and produce the documents demanded in the IRS summons, the government confessed error, conceding that there is no "tax crimes" exception to the Fifth Amendment privilege against self-incrimination.

[1] There is no general "tax-crime" exception to the fifth Amendment. Troescher's Fifth Amendment claims were not defeated simply because he feared prosecution for tax crimes.

[2] Ninth Circuit caselaw is clear that the Fifth Amendment may be validly invoked when the taxpayer fears prosecution for tax crimes.

COUNSEL

Joe Alfred Izen, Jr., Bellaire, Texas, for the respondent-appellant.

John A. Dudeck, Jr., Tax Division, United States Department of Justice, Washington, D.C., for the petitioner-appellee.