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The Federal Appeals Court's Ruling on Tax Returns and Subpoenas Duces Tecum

On Wednesday, October 7, 2020, the U.S. Court of Appeals for the Second Circuit ruled that President Donald J. Trump's accounting firm must respond to a subpoena duces tecum requesting Trump's tax returns and other financial records. The three-judge panel returned a unanimous decision that puts a setback on Trump's battle to keep his financial information private. The case also provides a couple of reminders about this type of subpoena.

The Difference Between a Subpoena and a Subpoena Duces Tecum

Typically, when someone hears that a person has been subpoenaed, they think of a witness being required to testify in a criminal or civil case. And while one type of subpoena functions that way, another, called a duces tecum, has a different use.

"Duces tecum" means "you shall bring with you." Such a subpoena requires a witness to bring the documents, material or items within the person’s or company’s possession. The witness will also have to answer questions unless there is a legal basis to refuse to answer. Types of items produced includes:

  • Business records
  • Computer files including emails
  • Medical bills
  • Employee records
  • Documents
  • Physical items

In the recent case involving Trump, Manhattan District Attorney Cyrus R. Vance Jr. sought to obtain financial records from Trump's accounting firm Mazars USA. In August of 2019, Vance issued a subpoena duces tecum for Trump's tax returns dating back to 2011. The scope of Vance's inquiry hasn't been disclosed publicly because of the secrecy of grand jury proceedings. But the New York Times reported that the district attorney is looking into possible tax and insurance fraud and falsification of business records, in addition to hush payments made to two women for not discussing alleged extramarital affairs with Trump, which the president has denied.

How to Respond to a Subpoena Duces Tecum

A person or company served with a subpoena duces tecum can respond in a couple of ways. One is by producing the requested materials. Production of items called for must be undertaken carefully so as to ensure that a thorough search for the items subpoenaed is undertaken. In addition, a review of items must be undertaken to determine whether there is a legal basis to contest the production. Reasons to legally contest production can include the existence of a legal privilege to not produce the documents or items. Legal reasons include the items are subject to a privilege such as the attorney client privilege, accountant client privilege, the Fifth Amendment privilege, and the Act of Production privilege.

Subpoena Duces tecum recipients have the option of challenging the subpoena. To pursue this avenue, the recipient of this subpoena must file a motion setting forth objections to the subpoena before the deadline specified in the subpoena. Ignoring the subpoena can result in the court issuing an order requiring the subpoena recipient to show the court why the court should not hold the person or company in contempt.

An objection to a subpoena duces tecum can be based on several grounds, such as:

  • It was improperly served
  • It is overly broad
  • It requests privileged information
  • It is vague or ambiguous
  • It requests documents irrelevant to the case
  • It gives insufficient time to gather the items set forth in the subpoena

In an earlier blog, we discussed in detail a few grounds for objection and considerations recipients must make when served with subpoenas.

In Trump's case, his lawyers initially objected to the subpoena, asserting that the president was immune to criminal prosecution. In July of 2020, the U.S. Supreme Court rejected that argument. However, it said that Trump might have other ways to challenge the subpoena.

After that ruling, Trump's attorneys tried to block enforcement of Vance's subpoena duces tecum by claiming that it was overly broad and issued in "bad faith." President Trump’s attorneys claimed that if the district attorney was only looking into an alleged payoff, he was seeking too much information by asking for tax returns as far back as 2011.

In September of 2020, the U.S. Court of Appeals for the Second Circuit asked Vance to clarify the scope of his investigation because it did appear that the subpoena was "very broad." Then, just this month, the federal appeals court decided that the district attorney's request was justified.

Trump's lawyers are expected to return to the U.S. Supreme Court to hear the case again.

Seek Skilled Legal Counsel

If you are being investigated for an alleged offense and have been served with a subpoena duces tecum, it's imperative that you speak with an attorney about your case before turning over any documents. At the Law Offices of Horwitz & Citro, P.A., our team in Orlando has extensive legal experience dealing with subpoenas duces tecum and can provide the representation you need.

For a free initial consultation, call (407) 901-5852 or contact us online.