This raises in all cases the constitutional question of whether the taxpayer is being deprived of his property without due process of law, on top of other issues that have come up in specific cases, such as the propriety of a search and seizure (in Jerry Woods' case an IRS agent made a search of his home after state narcotics officers had gone through the front door with a battering ram), right to counsel and the privilege against self-incrimination. For those left with enough money to hire lawyers and get into court, the results have varied. The US courts of appeal have split on whether a taxpayer is entitled to an immediate tax court hearing-the second and seventh circuits have ruled for the IRS and the fifth and sixth circuits have held for the taxpayer. Because of this conflict, on October 15, 1974 the US Supreme Court agreed to hear two cases: one is the sixth circuit's decision in favor of Mrs. Hall, and the other is a second circuit decision for the IRS in the case of Mr. Laing, a New Zealand citizen who was found leaving the US with $306,896 in cash and who was promptly assessed with a tax in the predictable amount of $310,000. (The second circuit had also ruled for the IRS on a termination assessment against Clifford Irving.) So this question at least should be resolved within the next few months. Legality aside, there is the policy question whether the IRS should be in the business of narcotics law enforcement. In Mrs. Willits' case, the judge said, “The IRS has been given broad power to take possession of the property of citizens by summary means that ignore many basic tenets of pre-seizure due process in order to prevent the loss of tax revenues. Courts cannot allow these expedients to be turned on citizens suspected of wrongdoing-not as tax collection devices but as summary punishment to supplement or complement regular criminal procedures." And in Mr. Woods' case: "This Court is certainly favorable to cooperation between state and federal agencies, but I think it is a miscarriage of that principle to use the Internal Revenue Service as an arm for state enforcement of criminal proceedings. And I don't think Congress ever intended that the IRS be used for that purpose." These abuses can be positively harmful to legitimate tax collection and narcotics law enforcement alike. There is some evidence that they have had a demoralizing effect on regular IRS auditors who see their professionalism tainted. And in some cases illegal tactics actually prejudice, rather than assist, effective prosecution of narcotics violations. In his speech to the American Bar Association in Honolulu on August 14, 1974, Commissioner of Internal Revenue Donald C. Alexander acknowledged that "there are influences . . . which do affect the integrity [of the tax administration effort]. These influences arise most often when either the framing or the application of tax laws do not have the raising of revenue as their principal objective. . . . Selective enforcement of tax laws, designed to come down hard on drug dealers . . . promotes the view that the tax system is a tool to be wielded for policy purposes, and not an impartial component of a democratic mechanism which applies equally to all of us. . . . we have changed the criteria for IRS involvement in anti-narcotics . . . activities." So what changes have been made? On May 31, 1974. possibly reacting to a critical Wall Street Journal article, the IRS instructed its agents to be more careful in termination cases. And IRS spokesmen say their manual is now being revised so that taxpayers will be given some kind of conference to discuss the tax, but still only after the assessment and seizures have been completed and still without giving the taxpayer a written explanaion of how the tax was computed. The head of the Narcotics Project in one major city said agents are no longer figuring taxes on the basis of a presumed level of drug dealing except in “very solid" cases. He also emphasized that most of the work of the Narcotics Project is now on normal audits, and termination assessments. Still, in view of Commissioner Alexander's remarks, why should there be a Narcotics Project at all? Much now depends on the Supreme Court's decision in the Hall and Laing cases. If it rules that a taxpayer has a right to immediate court review of a termination assessment and that his property cannot be sold in the meantime, that may be enough to restore a professional character to IRS actions. If the Court upholds the IRS, there will be a clear need for corrective legislation. 152 THE BUDGET FOR FISCAL YEAR 1977 LAW ENFORCEMENT AND JUSTICE This function includes those Federal programs that provide judicial services; police protection; and the apprehension, prosecution, detention and rehabilitation of criminals, along with financial and technical assistance to States and localities for their own criminal justice systems. Program Highlights Intensify efforts to curtail illegal commerce in firearms and • Strengthen programs to reduce illegal traffic in narcotics • Increase resources devoted to litigation and court support. • Adopt a more cautious approach to new State and local Expand resources for increased enforcement of the anti- Emphasize apprehension and deportation of illegal aliens. State and local governments have the primary responsibility for law enforcement and the administration of justice; they will spend an estimated $15 billion for these purposes in 1977. Proposed Federal outlays for law enforcement and justice, which include $834 million of assistance to State and local governments, are estimated to be $3.4 billion in 1977-nearly the same as in 1976. In 1978, outlays for these programs are projected to be $3.3 billion. Further discussion of Federal activities in the law enforcement area is contained in Special Analysis N, "Federal Programs for the Reduction of Crime." Federal law enforcement and prosecution.-Outlays for Federal law enforcement and prosecution will increase slightly in 1977 to an estimated $1,933 million. During the past year, the Bureau of Alcohol, Tobacco and Firearms (ATF) began an intensified effort to curtail illegal commerce in firearms. This action is designed to assist local police in disrupting distribution channels and prosecuting those who engage in this trade. Vigorous enforcement of present firearms laws will complement the Administration's legislative proposals, which include mandatory sentences for felons convicted of using such weapons, prohibitions on the manufacture and sale of "Saturday night specials," and a man Information on budget authority for 1975, 1976. and the transition quarter is shown in table 14 of Part 8. datory waiting period between purchase and receipt of handguns. In 1977, outlay increases for ATF programs to reduce violent crime will be partially offset by reductions in activities related to illegal liquor production, which has declined sharply in recent years. The Customs Service will reduce staff in 1977 to reflect the impact of an unanticipated decline in the number of travelers who arrived from foreign countries and formal import entries recorded in 1975. Within the Immigration and Naturalization Service (INS), staff will be redeployed to emphasize apprehension, detention, and ultimate deportation of illegal aliens. Border patrol operations will continue at 1976 levels. Expected productivity gains will allow modest staff reductions for port-of-entry inspections and background investigations of immigrants seeking U.S. citizenship. The Drug Enforcement Administration (DEA) coordinates Federal activities to control illegal production and sale of narcotics and dangerous drugs, provides technical assistance and training to support State and local police, and assists foreign governments in curbing smuggling. DEA will emphasize control of hard drugs and concentrate its resources on high level offenders in order to disrupt distribution channels and organizations. Outlays for the Federal Bureau of Investigation will decline slightly due to expected productivity increases, improved management practices, and deferred acquisition of selected equipment. The intensive. effort to combat white collar and organized crime will not be diminished. The Justice Department conducts most Federal litigation in both civil and criminal matters. Most Washington-based legal divisions will be held to 1976 staff levels. However, additional resources are requested for the Antitrust Division in order to carry out the Administration's program for increased enforcement of the antitrust laws. Staff in the U.S. attorneys' field offices will expand by 9% to handle burgeoning civil and criminal caseloads of increasing complexity. The Legal Services Corporation provides aid in non-criminal cases for clients who are unable to afford legal services; outlays are estimated to be $83 million in 1977. Constitutional guarantees of equality are enforced through civil rights programs of the Department of Justice and other Federal agencies. These programs are discussed in detail in Special Analysis M, "Federal civil rights activities." THE FEDERAL PROGRAM BY FUNCTION 155 Federal judicial activities.—By law, the President's budget forwards estimates for the Judiciary without change. In 1977, the budgets of the Supreme Court, the appellate and district courts, other activities of the judicial branch in this subfunction, and certain other judicial activities amount to $378 million, an increase of 12% from 1976 level of $338 million. Federal correctional and rehabilitative activities.—Three new correctional institutions will be activated and construction will begin on four additional facilities-metropolitan detention centers in Detroit and Phoenix, a youth correction center in Alabama, and an adult correction center in New York. These facilities are needed to alleviate overcrowding problems in existing penal institutions. Law enforcement assistance.-The Law Enforcement Assistance Administration (LEAA) is responsible for providing Federal assistance to State and local criminal justice systems; legislation to extend the LEAA program for 5 years has been submitted to the Congress. In 1977, proposed outlays for LEAA grant programs will decline by 8%, reflecting a more cautious approach in this area. Improved selectivity in grant activities, coupled with a greater distribution of resources for evaluation and research, will enable LEAA to determine and pursue those programs which promise the most impact on reducing crime in the United States. Such evaluation will improve decisions on the level and direction of LEAA assistance. In 1977, State and local governments will be asked to pay one-half the costs of law enforcement training programs conducted for their officials by the FBI. Other Federal agencies will continue to provide technical assistance upon request. |