007, a dozen or so armed agents/officers wearing flak jackets and with guns showing, from and/or associated with the Criminal Division of the Internal Revenue Service (IRS), served a search warrant on the Fort Wayne, Indiana residence of Jim and Denise Simon, while Jim Simon was working in Europe. Denise, at the time, was home preparing her youngest child, a ten year old daughter, for school. The extensive search continued from early morning until late into the evening. Denise was so affected by the events and the deplorable treatment of her by the agents that three days later, on November 9th, she took her own life. She left a typewritten suicide note which stated:

 

"I am truly innocent of any attempt to evade taxes, launder money, commit fraud or the other things I am being accused of … I also have no faith in the legal system or the ability of the government to seek the truth." Written in her own hand under the typed portion of the note, Denise further wrote, "With my dying breath I swear Jim and I are innocent."

The Simons were completely blindsided by the aggressive actions of the IRS, as they had not been contacted by any government representative about any legal concerns before the raid, nor had they received any summons or subpoenas requesting documents or questions to be answered. They had not been in trouble with the federal government before with their taxes or with regard to any other federal law for that matter. They simply were unaware the IRS had any concerns about their income tax returns. Immediately following the raid, the Simons hired an attorney to advise them and in particular seek out information as to what triggered the IRS investigation and what accounted for the unexplained excessive aggression of the IRS. Inquiries were made about the basis of this

On the morning of November 6, 2007, a dozen or so armed agents/officers wearing flak jackets and with guns showing, from and/or associated with the Criminal Division of the Internal Revenue Service (IRS), served a search warrant on the Fort Wayne, Indiana residence of Jim and Denise Simon, while Jim Simon was working in Europe. Denise, at the time, was home preparing her youngest child, a ten year old daughter, for school. The extensive search continued from early morning until late into the evening. Denise was so affected by the events and the deplorable treatment of her by the agents that three days later, on November 9th, she took her own life. She left a typewritten suicide note which stated "I am truly innocent of any attempt to evade taxes, launder money, commit fraud or the other things I am being accused of … I also have no faith in the legal system or the ability of the government to seek the truth." Written in her own hand under the typed portion of the note, Denise further wrote, "With my dying breath I swear Jim and I are innocent."

 

The Simons were completely blindsided by the aggressive actions of the IRS, as they had not been contacted by any government representative about any legal concerns before the raid, nor had they received any summons or subpoenas requesting documents or questions to be answered. They had not been in trouble with the federal government before with their taxes or with regard to any other federal law for that matter. They simply were unaware the IRS had any concerns about their income tax returns. Immediately following the raid, the Simons hired an attorney to advise them and in particular seek out information as to what triggered the IRS investigation and what accounted for the unexplained excessive aggression of the IRS. Inquiries were made about the basis of this conduct to no avail.

Soon thereafter, Attorney Frank Gray filed a motion in the United States District Court requesting Judge Springmann to unseal the probable cause affidavit used to obtain the search warrant. The U.S. Attorney’s Office eventually agreed and filed its very own motion to unseal the probable cause affidavit. The Court approved the unsealing of the probable affidavit commenting that the motion to unseal was "well taken", and an order to unseal was issued and received on June 28, 2008.

In reviewing the probable cause affidavit submitted by agent Paul Muschell, professionals were astounded to find what they consider to be numerous factual and legal errors, clear misrepresentations, and testimony which appeared to them to deliberately mislead the Court. In the opinion of the professionals, the affidavit not only failed to present a case of reasonable probable cause, it failed to provide the essential information necessary for the Court to make a proper judicial determination as to whether a search warrant should be issued. The mere fact the affidavit’s “conclusion” is one long “run on phrase,” and not a grammatically complete sentence, supports a common view that the affidavit was not even appropriately and carefully reviewed before its submission to the Court.

The fact that the investigating agent (Special Agent Paul Muschell) was allowed to continue to head the case investigation for more than two years after Denise’s death (the point at which he arguably became personally interested in the outcome of the case) is a truly troubling fact …troubling enough to raise serious issues of possible additional wrongful conduct by various IRS supervisors and managers. Astoundingly, Muschell continued to work the case as late as of February 2, 2010, long after the impropriety of his involvement was pointed out to the government.

Disappointingly, the probable cause affidavit did not reveal what triggered the IRS investigation. Moreover, all Jim Simon’s subsequent efforts and requests to obtain information through the Freedom of Information Act failed and/or were denied. In April of 2009, notice was given to the United States government that it was liable for, among several things, the wrongful death of Denise Simon. The government denied these claims in September of 2009. On October 30, 2009, on behalf of the Simon family, a lawsuit was filed against three IRS agents, and an unknown number of unknown individuals, for, among other things, the violation of constitutional and due process rights.

What happened to Denise Simon and her family is truly horrific and tragic. But sadly it appears the Simons’ experience is just one example of a persistent systemic problem within the IRS, a problem that has concerned Congress for over a decade.

In 1999, shortly after Congress passed the Internal Revenue Restructuring and Reform Act of 1998, which was expected to curb improper collection efforts and other problems within the IRS, a task force, known as the Webster Task Force (also known as the Webster Commission), was formed at the request of the then new IRS Commissioner. That task force conducted “…an independent review of CI (Criminal Investigation) and assess(ed) Cl's effectiveness in accomplishing its mission as the Service's criminal enforcement arm.” On April 9, 1999, the Webster Task Force reported its findings and listed 25 important specific recommendations for improvement of CI. Among the findings of the Webster Task Force was the following:

Unlike other federal law enforcement agents, CI Special Agents may employ only the “least intrusive means” necessary to investigate their cases effectively. Although search warrants are appropriate and often indispensable tools in the investigation of allegations of tax violations, CI agents do not routinely make detailed analyses of whether search warrants are the least intrusive means necessary to investigate their cases.

The Webster Task Force went on to recommend:

CI agents who wish to seek search warrants should produce a thorough written evaluation as to why conducting a search in the case is the least intrusive means necessary to obtain evidence.

Although the Webster Task Force stated that they found no evidence of systemic abuse by CI of search warrant authority, clearly, the Webster Task Force was concerned about abuse and/or the potential for abuse because it stated in its report:

The issue of whether CI is abiding by its own internal policy of employing minimally intrusive means in all cases, and whether it is making the additional assessment required by IRM 9.4.6.1 in tax and tax-related cases, was raised by a number of sources. The Commissioner asked that the use of search warrants be evaluated to determine whether “CI is adhering to the IRS policy of employing the least intrusive investigative techniques possible …” The Senate Finance Committee raised these same issues. Additionally, members of the American Bar Association Section of Taxation claim that CI agents are applying aggressive tactics from non-tax cases to tax investigations, ignoring the requirement that an assessment of intrusiveness be made.

The Webster Task Force also found that:

Fewer than 25% of the affiants interviewed (by the Task Force) were able to articulate a specific necessity for the search warrant…. Frequently, Special Agents stated that search warrant decisions were justified because the Assistant United States Attorney and the United States Magistrate Judge agreed with the agent’s assessment that probable cause existed. While this adequately meets the legal threshold, it is not the sole determinate under CI internal policies of whether a search warrant is appropriate in a particular case. No agent stated, nor was there any documentation to show, that the evaluative criteria of IRM 9.4.6.1 were considered, or that any other determination was made that the use of the warrant satisfied IRS policy.

The Webster Task Force concluded on this issue:

…there is insufficient evidence that CI has consistently assessed the relevant intrusiveness criteria prior to acquisition of the search warrants. It must do so, and must document it. While this may make the search warrant process more cumbersome, it is the only way to ensure compliance with IRS policy.

The IRS subsequently adopted the Webster recommendations. In mid 2001, TIGTA (Treasury Inspector General for Tax Administration) audited the IRS to ascertain how well the IRS had implemented the Webster recommendations. TIGTA reported in June 2001 that the IRS had satisfactorily implemented all but three of the 25 recommendations. One of the recommendations which were not properly or fully implemented was the Webster Task Force’s recommendations concerning search warrants and specifically the use of search warrants only as the least intrusive method of gathering evidence as required by IRS policies.

Specifically, TIGTA reported:

Criminal Investigation Management Needs to Monitor Special Agents’ Search Warrant Activities

The CI function needs to enhance its existing practices to ensure special agents’ search warrant activities are appropriately monitored. This process must be effective to ensure special agents’ use of search warrants is the least intrusive means necessary to obtain evidence. The CI function has not required periodic reviews to ensure the consistent preparation of search warrant and risk assessment documentation. Periodic reviews of search warrant documents are essential to ensure that the CI function is not at risk of jeopardizing its criminal investigations. Search warrants are used to obtain evidence of potential violations of the federal internal revenue laws under the CI function’s jurisdiction. To obtain a search warrant, law enforcement agencies must show that there are sufficient facts and circumstances to believe that a crime was or is being committed and the property subject to seizure is on the premises to be searched (probable cause). The IRS policy requires the CI function to determine whether the use of a search warrant is less intrusive than a wiretap or any other method used to obtain the evidence.

The Webster Commission reviewed the CI function’s use of search warrants and concluded there was insufficient documentation that the CI function had consistently assessed whether the use of search warrants conformed to the IRS’ policy of using the least intrusive means to obtain evidence. The Webster Commission recommended that the CI function establish procedures for a thorough written evaluation on the use of search warrants, a written approval process with the Special Agent-in-Charge (SAC) as the approving official, and uniform classification of risks. In addition, the Webster Report recommended that the preparation of a post-operational memorandum identifying and quantifying the force actually employed during the execution of the search warrant be mandated and that a uniform policy for file maintenance be established. The CI function took steps to address the concerns raised by the Webster Commission. For example, in November 2000, the CI function completed a review of search warrants issued between October 1, 1999, and February 29, 2000. The CI function concluded that adequate documentation was not prepared to support the use of search warrants as the least intrusive means to obtain the evidence, the Risk Assessment Guide was often inadequately completed, and use of the Post Enforcement Operation Summary Form was optional rather than mandatory. The Chief, CI, took immediate action to notify the CI executives and managers of the problems identified concerning the lack of documentation on intrusiveness and the minimizing of risk. To eliminate confusion, the Chief, CI, also issued instructions to the SACs making the use of the Post Enforcement Operation Summary Form mandatory. Without sufficient documentation, the CI function cannot ensure the IRS Commissioner or the public that its use of search warrants is the least intrusive means for obtaining evidence.

Conclusion:

The IRS has had eight years to “get it right” when it comes to the use of search warrants: April 1999 (date of the Webster report) to November 2007 (date of Denise Simon’s death). However, they failed to get it right …and in spite of the criticism reflected in the 2001 TIGTA audit report. At this time not all the facts are known. For example, it is not known if the special agent in the Simon case did or did not make a determination that a search warrant was the least intrusive method to obtain evidence (as required by IRS policy); or if he did make a determination, whether he documented it; or if he did make a determination and did document it, that his determination and documentation was properly reviewed by others. What is known is that the IRS did not use the least intrusive means of investigation, as required by the IRS’s own policies. It is known because the IRS did not contact and inform the Simons of any of their concerns before the raid. The Simons did not receive any requests for information from IRS investigators before the raid, and no summon or subpoena was served upon the Simons before the raid. (Even today, more than two years after the raid, the IRS has not sought any information directly from Jim Simon or other surviving family members). It is believed that if the least intrusive means necessary were used, the Simons would have responded appropriately, no search warrant would have been sought and issued, and most importantly, Denise Simon would most likely be alive today. And, the untold pain and suffering experienced by Denise Simon and her family would have been avoided.

Despite the fact the IRS has denied Simon's requests for information, enough is now known to reasonably conclude that the actions taken by the IRS, which led to Denise’s death, were wrongful and unnecessary. And, it is fair to conclude that the Simon family members, and in all likelihood untold other citizens across our country, are victims of a serious systemic problem within the IRS, a problem identified and voiced by the American Bar Association, the Senate Finance Committee, the Commissioner of the IRS, the Webster Task Force, and TIGTA over 10 years ago.

As matters stand today, Congress and TIGTA agree that search warrants should be used only when less intrusive means are not available. IRS policy even reflects such agreement. However, we know today that the policy is not being appropriately monitored and enforced as evidenced by the death of Denise. Moreover, we know that IRS agents are aware that they are free to ignor the IRS policy to utilize least intrusive methods necessary because agents Muschell, Porter, and Patton in their February 26, 2010 answer to the Simon suit against them (paragraph 26) state that the IRS "Manual is for internal guidance and does not confer substantive rights." ...Unless something is done, more suffering and abuse lies in wait to harm more citizens.

One possible solution to the problem would be to require the IRS as a matter of law, to conduct a stringent review of all search warrant applications by special agents to assure that if granted the search warrants would constitute the least intrusive method of investigation, as is the policy of the IRS. We suggest more specifically that (1) each special agent’s request and affidavit for search warrant be reviewed by the agent’s group manager, the special agent in charge (SAC) and the Assistant United States Attorney assigned to the case; and (2) that each of these individuals be required to prepare written documentation and an affidavit attesting to the fact that they reviewed the affidavit and have properly and independently determined that the request for search warrant is proper and meets all of the IRS’ requirements and policies, including a factual finding that the issuance of a search warrant is indeed the least intrusive method of investigation available to the IRS. Moreover, we support enactment of federal law so that any failure to follow proper procedures (by any individuals involved in reviewing, processing, and/or approving an IRS search warrant application) would constitute a federal crime. Additionally we support enactment of federal law which would require, that in the event there is a judicial determination that less intrusive means were available to the IRS and were not fully utilized prior to applying for a search warrant, any search warrant so obtained would be deemed wrongfully obtained, and any and all evidence obtained from (or led to) as a result of such wrongfully obtained search warrant would be inadmissible in any proceedings against any taxpayer.

Certainly, what should not stand is the current situation in which the IRS on one hand assures the public and Congress that taxpayers are protected by IRS policy as stated in the IRS Manuel, which mandates the use of least intrusive means necessary, while on the other hand the IRS willfully fails to monitor and enforce that very same policy. Such failure to appropriately monitor and enforce its own policies constitutes a most serious violation of the public trust and an outragious wrongful assault on the rights of all citizens. If Congress had adequately addressed this problem in 1999, when the Webster Report was published, or in 2001, when the TIGTA Audit Report was published, Denise Simon would most likely be alive today.

What can be done? Support an enactment of a new federal law; a law that will assure you and no one else, will ever suffer, at the hands of the IRS, the horror suffered by Denise Simon and her family. If new federal law is enacted and the IRS, as a matter of law, is required to simply enforce its own policy (to use the least intrusive means necessary when conducting investigations), Denise Simon’s death will not have been in vain and all our rights will be better protected. rememberdenise.org./

April 17, 2010