United States v. Powell (379 U.S. 48)/Dissent Douglas

Mr. Justice DOUGLAS, with whom Mr. Justice STEWART and Mr. Justice GOLDBERG concur, dissenting.

Congress, by the three-year statute of limitations that bars assessments of tax deficiencies except (so far as relevant here) in case of fraud, 26 U.S.C. §§ 6501(a) and (c), has brought into being a 'statute of repose' that I would respect more highly than my Brethren. I would respect it by requiring the District Court to be satisfied that the Service is not acting capriciously in reopening the closed tax period. Since the agency must go to the court for process to compel the production of the records for the closed tax period, I would insist that the District Court act in a judicial capacity, free to disagree with the administrative decision unless that minimum standard is met.

Oklahoma Press Pub. Co. v. Walling, 327 U.S. 186, 66 S.Ct. 494, 90 L.Ed. 614, does not seem to me to be relevant. It dealt with the usual investigative powers of administrative agencies; and as the Court said in that case, Congress set no standards for administrative action which the judiciary first had to weigh and appraise. Id., 215-216, 66 S.Ct. 508-509. Here we have a congressional 'statute of repose' embodied in the three-year statute of limitations. I would make it meaningful by protecting it from invasion by mere administrative fiat. Where the limitations period has expired, an examination is presumptively 'unnecessary' within the meaning of § 7605(b)-a presumption the Service must overcome. That is to say, a re-examination of the taxpayer's records after the three-year period is 'unnecessary' within the meaning of § 7605(b), unless the District Court is shown something more than mere caprice for believing fraud was practiced on the revenue. Without that minimum safeguard the statutory status of repose becomes rather meaningless.