UNITED STATES SUPREME COURT DECISIONS ON-LINE

The Internal Revenue Service (IRS), having investigated the income tax liability of a taxpayer who was a fugitive from justice, determined deficiencies for two taxable years, and because of the taxpayer's failure to file proper returns and his fugitive status, made jeopardy assessments pursuant to § 6861(a) of the Internal Revenue Code of 1954. Petitioner corporation was determined to be the alter ego of the taxpayer. Thereafter, pursuant to a decision to levy upon and seize automobiles registered in petitioner's name in partial satisfaction of the assessments against the taxpayer, agents made warrantless seizures of several such automobiles from property in which petitioner had no interest. For the purpose of levying on other property subject to seizure, they also went to petitioner's office, a cottage-type building, and made a warrantless forced entry. Pending further information as to whether the cottage was an office or a residence, the agents made no initial seizures, but two days later they again entered the cottage without a warrant and seized books, records, and other property. Thereafter petitioner, claiming that it was not the taxpayer's alter ego, that the assessment was invalid, and that the seizures of the automobiles and the contents of the office violated the Fourth Amendment, instituted this suit, seeking return of the automobiles, suppression of evidence obtained from the seized documents, and damages from the IRS agents. The District Court entered judgment for petitioner, finding that the IRS agents had committed illegal searches and seizures in violation of the Fourth Amendment. The Court of Appeals for the most part reversed, ruling that the assessments were valid, that the evidence conclusively established that petitioner was the taxpayer's alter ego, and that the warrantless searches and seizures were not unconstitutional. Section 6331(a) of the 1954 Code authorizes the IRS to collect taxes "by levy upon all property and rights to property" belonging to a person who "neglects or refuses to pay" any tax, and § 6331(b) defines "levy" as including "the power of distraint and seizure by any means."

Held:

1. This Court granted certiorari limited to the Fourth Amendment issue, and thus accepts the Court of Appeals' determinations that the assessments and levies were valid and that petitioner was the taxpayer's clubjuris

Page 429 U. S. 339

alter ego. Petitioner does not challenge any other aspect of probable cause to believe that the items seized were properly subject to seizure, and therefore the only question before the Court is whether warrants were required. P. 429 U. S. 351.

2. The warrantless automobile seizures, which occurred in public streets, parking lots, or other open areas, involved no invasion of privacy and were not unconstitutional. @ 59 U. S. 351-352.

3. The warrantless entry into the privacy of petitioner's office violated the Fourth Amendment, since,

"except in certain carefully defined classes of cases, a search of private property without proper consent is 'unreasonable' unless it has been authorized by a valid search warrant."

Camara v. Municipal Court, 387 U. S. 523, 387 U. S. 528-529. Pp. 429 U. S. 352-359.

(a) Business premises are protected by the Fourth Amendment, and corporations have Fourth Amendment rights. The intrusion here was based not on the nature of petitioner's business, its license, or regulation of its activities, but on the ground that its assets were seizable to satisfy tax assessments, which does not justify depriving petitioner of its Fourth Amendment rights simply because it is a corporation. Pp. 429 U. S. 353-354.

(b) Neither the history of the common law and the laws in several States prior to the adoption of the Bill of Rights nor the case law since that time justifies creation of a broad exception to the warrant requirement for intrusions in furtherance of tax enforcement. Pp. 429 U. S. 354-356.

(c) Section 6331(b) must be read as authorizing only warrantless seizures, as opposed to warrantless searches. Pp. 429 U. S. 356-358.

(d) This case does not fall under the "exigent circumstances" exception to the warrant requirement, as is clear from the agents' own delay in making the entry in which the records were seized. Pp. 429 U. S. 358-359.

4. Of the various remedy issues raised by petitioner, only the issue of damages against the individual agents need be addressed under the limited grant of certiorari and in the present posture of the case. Petitioner has shown violation of its constitutional rights. Whether, as the Government contends, petitioner is not entitled to money damages if the agents acted in good faith should be considered by the courts below in the light of all the facts, including IRS procedures based upon Murray's Lessee, supra, the existence of proof of any injury to petitioner resulting from the entry and temporary seizure of books and records, and the immunity issue reserved in Bivens v. Six Unknown Fed. Narcotic Agents, 403 U. S. 388. Pp. 359-360.

514 F.2d 935, affirmed in part, reversed in part, and remanded. clubjuris

Page 429 U. S. 340

BLACKMUN, J., delivered the opinion for a unanimous Court. BURGER, C.J.,filed a concurring opinion, post, p. 429 U. S. 361.